Wells Fargo Downgrades Apache Corp. (APA) to Market Perform
- Banks drag Wall Street lower as growth fears, rate outlook weigh
- AIG (AIG) Misses Q4 EPS by 19c; Raises Buyback to $5B, Announces Dividend Increase
- CBS Corp. (CBS) Reports In-Line Q4 EPS
- JPMorgan's Dimon buys more than $25 million of company stock
- After-Hours Stock Movers 02/11: (GRPN) (COLM) (ELLI) Higher; (NUS) (SCSS) (ATVI) Lower (more...)
Wells Fargo downgraded Apache Corp. (NYSE: APA) from Outperform to Market Perform and lowered its valuation range to $95-$105 from $116-$120.
Analyst David Tamero comments, "We are downgrading Apache as we prefer other names within the large cap space, which would include EOG, APC and DVN (with DVN being upgraded earlier this week). In our opinion, from a share price perspective, Apache has taken the right steps in cleaning up its portfolio, re-allocating capital, and buying back shares. However, while the stated absolute growth percentages are similar to its peers, Apache debt adjusted cash flow (2015E: 10% vs. 12%) and production per debt-adjusted share metrics (2015E: 1% vs.9%) lag the rest of our large cap universe."
He added, "The risk to our downgrade is 2-fold: 1) Apache divests itself of Kitimat, thereby removing the capital commitment. We think this is likely sooner rather than later, and it would remove an overhang on the shares. The shares could move higher on that. 2) Apache begins to consistently hit its quarterly numbers. The company has been plagued by a number of one-off events over the past few years, but missing quarterly production reinforces a Street perception that Apache can’t execute as well as others. While we think that perception is misguided, it is the perception. And the only way to remove that perception is to hit numbers. Admittedly, of the names we are downgrading, this is the change we feel the least confident about given low expectations and laggard performance.
Shares of Apache Corp. closed at $93.17 yesterday.
Serious News for Serious Traders! Try StreetInsider.com Premium Free!
You May Also Be Interested In
- Credit Suisse Upgrades First Data Corporation (FDC) to Outperform; Shares Hit 'Rock Bottom'
- Piper Jaffray Cuts Price Target on Genomic Health (GHDX) After 4Q Reports In-Line with Preliminary Results
- Piper Jaffray Cuts Price Target on Euronet Worldwide (EEFT) Following 4Q Results
Create E-mail Alert Related CategoriesAnalyst Comments, Analyst PT Change, Downgrades
Related EntitiesWells Fargo
Sign up for StreetInsider Free!
Receive full access to all new and archived articles, unlimited portfolio tracking, e-mail alerts, custom newswires and RSS feeds - and more!