APA Corp

APA: XNAS (USA)

Morningstar Rating for Stocks	Fair Value	Economic Moat	Capital Allocation
	$89.00	Twxsx	Jwvlbkcr

APA Earnings: Management Revises Synergies; We Still Believe Shares Are Undervalued

Stephen Ellis ,

May 2, 2024

No-moat APA missed on FactSet consensus earnings per share by 19% while delivering on sales. It also came below the midpoint of guidance on production, but only narrowly. The earnings miss was driven by the write-off of two exploration locations in Alaska and one in Suriname. Despite these disappointing results, management remained an active repurchaser of shares, which, we believe, is a prudent action after the close of the stock-heavy Callon acquisition in April. Our new fair value is $54, down slightly from $55, driven mainly by the removal of one rig in acquired acreage and changes to our near-term commodity price forecast.

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