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Assessing APA (APA) Valuation After Recent Share Weakness And Analyst Target Gap

Simply Wall St · 5d ago

APA’s recent share performance and what it may signal

APA (APA) shares have seen a 2.4% decline over the past day and a 3.3% decline over the past week, adding to weaker month and past 3 months returns that may prompt closer investor review.

See our latest analysis for APA.

Looking past the recent weakness in the 1 month share price return, which is down 11.9%, APA’s 1 year total shareholder return of 6.24% contrasts with a much weaker 3 year total shareholder return of 38.38% and a 5 year total shareholder return of 47.11%, suggesting a loss of momentum following an earlier period of stronger performance.

If APA’s recent moves have you reassessing your energy exposure, it may be useful to compare the company with other US oil and gas names through aerospace and defense stocks.

With APA trading below some analyst targets and at a stated discount to certain intrinsic measures, you might ask yourself whether this energy name is quietly undervalued or if the market is already factoring in any potential future growth.

Most Popular Narrative: 8.9% Undervalued

With APA last closing at US$23.88 against a narrative fair value of about US$26.21, the current price sits below that implied level, setting up a value gap that this widely followed story tries to explain.

The analysts have a consensus price target of $23.815 for APA based on their expectations of its future earnings growth, profit margins and other risk factors. However, there is a degree of disagreement amongst analysts, with the most bullish reporting a price target of $35.0, and the most bearish reporting a price target of just $16.0.

Read the complete narrative.

Analysts are factoring in shrinking revenue, higher margins, and a lower future P/E multiple, yet still arrive at a level above today’s price. Curious which assumptions carry the most weight?

Result: Fair Value of $26.21 (UNDERVALUED)

Have a read of the narrative in full and understand what's behind the forecasts.

However, this story could change quickly if energy transition policies curb oil and gas demand faster than expected, or if Egypt related disruptions hit production and cash flow.

Find out about the key risks to this APA narrative.

Build Your Own APA Narrative

If you see the story differently, you can test every assumption against the data yourself and shape a version that fits your view, then Do it your way in just a few minutes.

A great starting point for your APA research is our analysis highlighting 4 key rewards and 2 important warning signs that could impact your investment decision.

Looking for more investment ideas?

If APA is only one piece of your watchlist, now is the time to broaden your research and line up a few fresh ideas.

Do not wait for headlines to tell you what you missed. Start comparing these ideas now and decide which ones deserve a closer look.

This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.