Oppenheimer analyst Fadel Gheit reiterated an Outperform rating on Apache (NYSE: APA) yesterday and set a price target of $57. The company’s shares closed yesterday at $38.63, close to its 52-week low of $38.37.
Gheit wrote, “Based on APA’s guidance for production, costs, and CAPEX, and current strip prices of $53.54/b Brent, $49.65/b WTI and $2.78/mcf Henry Hub natural gas in 2015 and $53.05/b, $49.13/b and $2.90/mcf, respectively, in 2016, we expect APA to have losses of $334M this year and $252M next year and generate operating cash flow of $3.3B and $4.0B, respectively. This will partially fund CAPEX of $4.6B and $3.75B, annual dividends of $378M and minority distribution of $67M and $57M, respectively, for a cash flow deficit of $1.7B and $169M, respectively. APA could fund the deficit from cash on hand.”
Currently, the analyst consensus on Apache is Moderate Buy and the average price target is $62, representing a 60.5% upside. In a report issued on September 8, Barclays also maintained a Buy rating on the stock with a $49 price target.
Based on Apache`s latest earnings report from June 30, the company posted quarterly revenue of $1.98B and quarterly net profit of -$5.6B. In comparison, last year the company earned revenue of $3.66B and had a net profit of $505M.
Financial bloggers on sites such as SeekingAlpha, wsobserver.com and others, seem to have a Positive view on APA. When evaluating the opinions of financial bloggers over the last 3 months, 73% of bloggers have indicated a Bullish sentiment, while 27% have indicated a Bearish sentiment. The average blogger Bullish sentiment in the sector is 73% which is less positive than the blogger sentiment of APA.
Unlike Oppenheimer`s latest rating, based on the recent corporate insider activity of 82 insiders, corporate insider sentiment is positive on the stock. This means that over the past quarter there has been an increase of insiders buying their shares of APA in relation to earlier this year. Last month, James L. House, a the Sr. RVP – Houston Region of APA sold 12,330 shares for a total of $581,446.
Gheit is ranked 0 out of 5 stars with an average return of -23.6% and a 5.2% success rate. Gheit covers the Basic Materials sector, focusing on stocks such as Range Resources Corp., Occidental Petroleum, and Royal Dutch Shell A.
Apache Corporation is an independent energy company that explores, develops and produces natural gas, crude oil and natural gas liquids.It has interests in six countries: the U.S., Canada, Egypt, Australia, the U.K. North Sea (North Sea), and Argentina.