On Tuesday, Piper Sandler adjusted its price target on shares of Apache Corp . (NASDAQ:APA), reducing it to $33.00 from the previous target of $35.00. The firm has decided to maintain a Neutral rating on the stock. The new price target is derived from a 35-year discounted cash flow (DCF) analysis, which uses a 10% discount rate, along with the anticipated year-end 2023 asset values.
The adjustment reflects several risks identified by the firm, including the potential for continued weak oil prices, which could impact Apache Corp's financial performance. Additionally, there are concerns about the possible disappointing exploration results in Suriname, a country where Apache has invested in search of new hydrocarbon reserves.
The company is also facing exposure to natural gas and natural gas liquids (NGL) prices, which can be volatile and affect revenue. Furthermore, country-specific risks in Egypt, where Apache operates, are also a potential concern due to the geopolitical and economic instability that can affect operations and profitability.
The revised price target suggests that Piper Sandler is taking a cautious stance on Apache Corp, factoring in the various challenges the company may face in the energy sector. The Neutral rating indicates that the firm does not see significant upside or downside potential from the current stock price level, based on their analysis.
InvestingPro Insights
In light of Piper Sandler's recent price target adjustment for Apache Corp. (NASDAQ:APA), current metrics from InvestingPro provide additional context for investors. With a market capitalization of $11.21 billion and a low price-to-earnings (P/E) ratio of 3.35, which adjusts slightly higher to 3.81 for the last twelve months as of Q1 2024, Apache appears to offer value in terms of earnings. The company's revenue for the same period stands at $8.083 billion, despite a revenue decline of 10.65% year-over-year, suggesting challenges in growth.
InvestingPro Tips highlight that Apache has revised earnings upwards as per 7 analysts for the upcoming period, indicating potential optimism about the company's financial health. Moreover, the stock is trading near its 52-week low, which could be an attractive entry point for investors seeking value. With a dividend yield of 3.31% and a history of maintaining dividend payments for 54 consecutive years, Apache presents a compelling case for income-focused investors.
For those considering an investment in Apache Corp., InvestingPro offers additional insights and analysis. Currently, there are over 6 InvestingPro Tips available for Apache, which can be accessed through the dedicated InvestingPro page for the company. For a more comprehensive investment decision, use coupon code PRONEWS24 to receive an additional 10% off a yearly or biyearly Pro and Pro+ subscription, unlocking even more in-depth analysis and tips.
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