APA
APA Corporation
$38.80
Oil & Gas E&P
85%
FCF at Price Deck × Multiple
Mild
·
Conviction
Fair Value
Trading 3.8% below fair value
You pay
$38.80
Bear
$14.97
Fair
$40.34
Bull
$74.17
Bear
$14.97
-61.4%
FCF $1245M × 8x
Fair
$40.34
+4.0%
FCF $1779M × 11x
Bull
$74.17
+91.2%
FCF $2313M × 14x
Key Value Driver
Oil price assumption ($75/bbl base case)
Implied Market Multiple
10.1x
Summary
Our base-case estimate uses a valuation based on free cash flow under different commodity price assumptions and a valuation multiple. We then blend that result with the average analyst price target of $35.00 from 51 analysts, using a 35% weight on analyst consensus. That produces an estimated intrinsic value of $40.34 per share.
Warnings
Debt per share ($12.15) is significant relative to the stock price. Even small changes in the debt figure meaningfully shift what each share is worth.
Where you think oil prices will settle long-term drives over 80% of this valuation. The biggest risk isn't the company itself — it's getting the commodity price wrong.
Key Risks
- Growth DCF inappropriate — commodity volumes do not compound
- Geopolitical premiums are real but historically temporary
- Reserve replacement ratio below 100% for 3 years is existential