Ticonderoga Reiterates a 'Buy' on Apache Corp. (APA); Q1 Earnings Preview - Raising Estimates Slightly
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Price: $40.47 +1.18%
Rating Summary:
19 Buy, 26 Hold, 5 Sell
Rating Trend: = Flat
Today's Overall Ratings:
Up: 13 | Down: 14 | New: 11
Rating Summary:
19 Buy, 26 Hold, 5 Sell
Rating Trend: = Flat
Today's Overall Ratings:
Up: 13 | Down: 14 | New: 11
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Ticonderoga reiterates a 'Buy' on Apache Corp. (NYSE: APA), PT $145.
Ticonderoga analyst says, "Apache releases first quarter results on Thursday 4/28. We are upping our 1Q EPS estimates from $2.06 to $2.32 on better realizations than initially forecast. We’re looking to hear more about how APA is integrating the $7+ billion worth of new assets picked up last year, particularly the BP (NYSE: BP)(NotRated) acreage in the Permian Basin, and more color on the plans for LNG in Kitimat and Australia. We continue to see APA as undervalued and reiterate our rating...In our view, APA’s core strength in recent years is the ability to buy assets at attractive prices and squeeze barrels out of them. Most of the 2010 asset adds are bolt-on to areas where APA operates, so we don’t foresee any major obstacles. The deepwater Gulf of Mexico could stretch capability, although the company already operates deepwater fields in Australia, so this isn’t entirely new."
"We still see APA as undervalued relative to peers, with a P/NAV of 70% vs. peers’ 85% and EV/2011 EBITDA at 4.7 vs. 7.2 for peers. Debt nearly doubled in 2010 to $9.4 B, but debt-to-asset value is only 11%, in line with peers...We’re raising our 2011 and 2012 earnings estimates slightly on better than originally assumed gas realizations for North America and international oil prices—60% of APA’s oil is tied to Brent. Production in 4Q averaged 729,000 boe/d; we are modeling a 3% drop in Q1 on lower Australia production (due to cyclones and the shut-in of the Van Gogh field) and the effects of freezing temperatures on Permian Basin production. Guidance is for 13-17% production growth in 2011; we currently estimate 14%."
For more ratings news on Apache Corp. click here and for the rating history of Apache Corp. click here.
Shares of Apache Corp. closed at $122.60 yesterday.
Ticonderoga analyst says, "Apache releases first quarter results on Thursday 4/28. We are upping our 1Q EPS estimates from $2.06 to $2.32 on better realizations than initially forecast. We’re looking to hear more about how APA is integrating the $7+ billion worth of new assets picked up last year, particularly the BP (NYSE: BP)(NotRated) acreage in the Permian Basin, and more color on the plans for LNG in Kitimat and Australia. We continue to see APA as undervalued and reiterate our rating...In our view, APA’s core strength in recent years is the ability to buy assets at attractive prices and squeeze barrels out of them. Most of the 2010 asset adds are bolt-on to areas where APA operates, so we don’t foresee any major obstacles. The deepwater Gulf of Mexico could stretch capability, although the company already operates deepwater fields in Australia, so this isn’t entirely new."
"We still see APA as undervalued relative to peers, with a P/NAV of 70% vs. peers’ 85% and EV/2011 EBITDA at 4.7 vs. 7.2 for peers. Debt nearly doubled in 2010 to $9.4 B, but debt-to-asset value is only 11%, in line with peers...We’re raising our 2011 and 2012 earnings estimates slightly on better than originally assumed gas realizations for North America and international oil prices—60% of APA’s oil is tied to Brent. Production in 4Q averaged 729,000 boe/d; we are modeling a 3% drop in Q1 on lower Australia production (due to cyclones and the shut-in of the Van Gogh field) and the effects of freezing temperatures on Permian Basin production. Guidance is for 13-17% production growth in 2011; we currently estimate 14%."
For more ratings news on Apache Corp. click here and for the rating history of Apache Corp. click here.
Shares of Apache Corp. closed at $122.60 yesterday.
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