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Investing.com - UBS raised its price target on Apache Corp . (NASDAQ:APA) to $19.00 from $18.00 while maintaining a Neutral rating ahead of the company’s second-quarter 2025 results, due in 23 days. The stock, currently trading at a P/E ratio of 7.05, appears undervalued according to InvestingPro analysis.
The price target increase comes as UBS expects Apache to highlight positive momentum in its cost reduction efforts, with potential upside to the company’s 2025 capture rate. These efficiency initiatives have contributed to the company’s impressive 24.91% revenue growth and maintained its strong 4.97% dividend yield.
UBS also noted continued efficiency gains in the Permian Basin, expecting Apache will be able to maintain flat production volumes with its current six-rig program going forward.
Despite these positive developments, UBS maintained its Neutral stance on the stock, describing Apache as more of a "show me" story.
The firm indicated that continued execution on cost reductions and operational efficiency would be required before a re-rating of the stock could occur.
In other recent news, APA Corporation announced the completion of its New Mexico asset sale, generating approximately $575 million in net proceeds. This transaction, which closed in June, impacted APA’s second-quarter U.S. production, reducing it by about 1.8 thousand barrels of oil equivalent per day. Additionally, APA reported curtailments in natural gas production due to unfavorable pricing conditions. In a related development, Permian Resources Corporation finalized its acquisition of oil and gas properties from APA in New Mexico, enhancing its presence in the Delaware Basin. APA also disclosed a net gain of $158 million before tax from oil and gas purchases and sales, including realized gains or losses from commodity derivatives.
In analyst updates, Wolfe Research lowered its price target for Apache to $34 while maintaining an Outperform rating, citing the company’s complex asset portfolio. Meanwhile, Raymond (NSE:RYMD) James raised Apache’s price target to $25, highlighting the company’s strong first-quarter performance and cost-cutting measures. APA’s financial strategy, including reduced capital expenditure and increased free cash flow, was noted as a factor in the revised target. Additionally, APA announced the departure of its Executive Vice President of Operations, D. Clay Bretches, marking a change in its executive team. These developments reflect ongoing strategic adjustments within APA Corporation.
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