UPDATE: Mizuho Securities Downgrades Apache On Price Outlook

In a report published Tuesday, Mizuho Securities analyst Jeffrey Connolly downgraded the rating on

from Buy to Neutral, and lowered the price target from $90.00 to $70.00. In the report, Mizuho Securities noted, “We are downgrading APA to Neutral, and lowering our price target to $70/share from $90/share based on our outlook for lower commodity prices. We are cutting our 4Q14 and 2015 estimates, as well. We estimate 2015 capex of ~$9.5 bn and cash flow of ~$6.5 bn, resulting in an outspend of ~$3.0 bn. While APA has adequate liquidity to fund the ~$3.0 cash flow outspend, net debt to EBITDA will increase to 1.9x at YE15 from 1.0x at YE14 by our estimate. Divesting the Wheatstone and Kitimat LNG projects would reduce the outspend by ~$1.7 bn in our view.” Apache closed on Monday at $63.81.