APA Corporation is approaching a pivotal period, with its fourth-quarter and full-year 2025 financial results scheduled for release on February 25. The upcoming report arrives amidst a backdrop of divergent analyst views, balancing a reliable dividend policy against concerns over production targets and crude oil price volatility.
Diverging Wall Street Perspectives
Financial institutions displayed a notable lack of consensus in their late-January assessments. RBC Capital Markets reaffirmed its “Sector Perform” rating while raising its price target to $26.00, citing current valuation as a primary reason. In a contrasting move, Morgan Stanley reduced its target to $21.00, maintaining an underweight recommendation on the stock. Goldman Sachs also persists with a sell rating, despite having increased its target price to $23.00.
This skepticism is largely rooted in uncertainties regarding production performance in APA’s core operational areas, Egypt and the North Sea. The market is watching to see if the company’s final quarter operational performance can successfully address these reservations.
Financial Commitments and Efficiency Drive
Undeterred by the cautious analyst outlook, APA remains committed to returning 60% of its free cash flow to shareholders. Investors who held the stock as of the January 22 record date will receive the quarterly dividend of $0.25 per share on February 23. Annualized, this payout equates to $1.00 per share.
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Concurrently, management is aggressively pursuing cost efficiency. The company aims to achieve $350 million in annual savings by the end of 2025, with a more ambitious target of $425 million in cost reductions set for the conclusion of the current year.
Key Operational Milestones and Capital Allocation
A major strategic focus is the “GranMorgu” project offshore Suriname. APA, in partnership with TotalEnergies, is managing an investment of approximately $10.5 billion in this venture, with first oil anticipated in 2028. Domestically, the company is concentrating its U.S. efforts on the Permian Basin, where capital expenditures of $1.3 billion are planned for the ongoing year.
The figures expected after the market closes on February 25 will provide a clear indication of APA’s progress toward its stated goal of reducing debt by $1 billion. Market experts are forecasting fourth-quarter earnings per share (EPS) to fall within a range of $0.62 to $0.68.
Upcoming Catalysts at a Glance:
* Earnings Release: February 25 (Q4 & Full-Year 2025)
* Dividend Payment: $0.25 per share, payable February 23
* Cost Reduction Target: $425 million by end of 2026
* Suriname Project: First oil production planned for 2028
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