APA Analyst Trims Price Target By 6% Given The Strip's Pullback

  • Raymond James analyst John Freeman reiterated a Strong Buy rating on the shares of APA Corp APA and lowered the price target to $70 from $75.
  • The move comes after the company provided Q3 supplemental information.
  • The analyst said at first glance, 3Q production screened mixed, with U.S. outperformance offset by lackluster international output.
  • However, contrary to Q2, the analyst said he has no reason to believe Egyptian volumes will land outside APA's original Q3 range, a silver lining given the huge 2H22 ramp.
  • The analyst has modeled Q3 FY22 production of ~378 MBoe/d, considering both U.S. outperformance and the North Sea's roughly 8 MBoe/d miss.
  • He lowered the price target, given the strip's pullback. With operational issues no longer handicapping Egypt, APA's in a position for a breakout in 2023, the analyst noted.
  • Price Action: APA shares are trading higher by 3.18% at $40.40 on the last check Wednesday.
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