APA stock price target maintained at $24 by RBC on cost improvements

Investing.com - RBC Capital maintained its Sector Perform rating and $24.00 price target on APA Corp. (NASDAQ:APA) on Monday, citing the company’s progress in cost reduction initiatives. The stock, currently trading at $22.54, has experienced a significant 12.66% decline over the past week, though InvestingPro analysis suggests the company is currently undervalued.

The investment firm noted that APA has made "significant strides in the scale and velocity of cost changes" and is working to build upon its recent quarterly performance improvements. Management is focusing on demonstrating consistent performance going forward. The company’s efforts appear to be paying off, with a notable 50.29% price return over the past six months and an attractive P/E ratio of 7.69x.

RBC highlighted that APA’s cash balances have improved following a payment that normalized Egypt receivables, though this does not flow through discretionary cash flow. The related payment to APA’s joint venture partner reduces the free cash flow calculation.

The firm identified several key topics currently being discussed among investors, including Permian well performance and depth, value derived from gas marketing contracts, potential value from exploration efforts, and possible upside from cost-saving measures.

APA’s ability to maintain the cost improvements demonstrated in the previous quarter appears to be a critical factor in RBC’s maintained rating and price target.

In other recent news, APA Corporation reported a net gain of $177 million from oil and gas transactions in the third quarter of 2025. The company revealed average realized prices of $66.00 per barrel for oil and $20.00 per barrel for natural gas liquids in the U.S., with international prices slightly higher. Benchmark has maintained its Buy rating and $33.00 price target for APA, adjusting its earnings per share estimate to $0.88 for the third quarter, which is above the consensus projection. Raymond James also revised its price target for APA, increasing it to $28.00 from $26.00, while keeping an Outperform rating. This adjustment was attributed to APA’s improved production and cash flow metrics, along with reduced capital expenditure guidance for 2025. Meanwhile, Tamboran Resources has made a Final Investment Decision for its Shenandoah South Pilot Project in Australia’s Beetaloo Basin, with commercial agreements secured for future gas sales. The project is expected to commence gas sales by mid-2026, following approvals from relevant authorities. These developments highlight ongoing strategic moves within the industry.

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