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On Monday, APA Group (APA:AU) (OTC: OTC:APAJF) received an upgrade in its stock rating from ’Hold’ to ’Buy’ by analysts at Jefferies. Accompanying the upgrade, the price target for APA Group was raised to AUD8.44, up from the previous target of AUD8.35. According to InvestingPro analysis, the stock appears undervalued at current levels, trading at an attractive P/E ratio of 9.2x.
The upgrade followed APA Group’s announcement of its first half of 2025 earnings before interest, taxes, depreciation, and amortization (EBITDA), which exceeded market expectations. Jefferies analyst Anthony Moulder highlighted the company’s solid performance and its strategic focus on supporting energy transmission as key factors behind the improved rating. The company maintains impressive gross profit margins of 91.7% and has consistently paid dividends for 25 consecutive years.
Moulder also praised APA Group’s ability to deliver cost savings and management’s confidence in funding growth options with the current balance sheet. This financial stability was seen as a strong indicator of the company’s potential for continued success.
Moreover, the expansion of the East Coast Grid by APA Group underscored the ongoing need for the development of domestic gas supply. This strategic move was noted as an important step in the company’s growth trajectory.
The raised price target reflects the analyst’s positive outlook on APA Group’s strategic investments and its commitment to enhancing energy infrastructure, which is expected to contribute to the company’s growth and performance in the energy sector.
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