Yahoo Finance APA Corporation Earnings Missed Analyst Estimates: Here's What Analysts Are Forecasting Now
APA Corporation (NASDAQ:APA) shareholders are probably feeling a little disappointed, since its shares fell 9.9% to US$29.26 in the week after its latest first-quarter results. It looks like a pretty bad result, all things considered. Although revenues of US$1.9b were in line with analyst predictions, statutory earnings fell badly short, missing estimates by 54% to hit US$0.44 per share. Following the result, the analysts have updated their earnings model, and it would be good to know whether they think there's been a strong change in the company's prospects, or if it's business as usual. We thought readers would find it interesting to see the analysts latest (statutory) post-earnings forecasts for next year.
See our latest analysis for APA
Taking into account the latest results, the current consensus from APA's 19 analysts is for revenues of US$9.21b in 2024. This would reflect a meaningful 14% increase on its revenue over the past 12 months. Statutory earnings per share are forecast to tumble 34% to US$4.86 in the same period. Yet prior to the latest earnings, the analysts had been anticipated revenues of US$9.26b and earnings per share (EPS) of US$5.01 in 2024. So it looks like there's been a small decline in overall sentiment after the recent results - there's been no major change to revenue estimates, but the analysts did make a small dip in their earnings per share forecasts.
It might be a surprise to learn that the consensus price target was broadly unchanged at US$41.19, with the analysts clearly implying that the forecast decline in earnings is not expected to have much of an impact on valuation. Fixating on a single price target can be unwise though, since the consensus target is effectively the average of analyst price targets. As a result, some investors like to look at the range of estimates to see if there are any diverging opinions on the company's valuation. Currently, the most bullish analyst values APA at US$58.00 per share, while the most bearish prices it at US$28.00. Note the wide gap in analyst price targets? This implies to us that there is a fairly broad range of possible scenarios for the underlying business.
Of course, another way to look at these forecasts is to place them into context against the industry itself. It's clear from the latest estimates that APA's rate of growth is expected to accelerate meaningfully, with the forecast 19% annualised revenue growth to the end of 2024 noticeably faster than its historical growth of 11% p.a. over the past five years. By contrast, our data suggests that other companies (with analyst coverage) in a similar industry are forecast to grow their revenue at 2.0% per year. Factoring in the forecast acceleration in revenue, it's pretty clear that APA is expected to grow much faster than its industry.
The Bottom Line
The most important thing to take away is that the analysts downgraded their earnings per share estimates, showing that there has been a clear decline in sentiment following these results. Happily, there were no major changes to revenue forecasts, with the business still expected to grow faster than the wider industry. The consensus price target held steady at US$41.19, with the latest estimates not enough to have an impact on their price targets.
With that in mind, we wouldn't be too quick to come to a conclusion on APA. Long-term earnings power is much more important than next year's profits. We have forecasts for APA going out to 2026, and you can see them free on our platform here.
Before you take the next step you should know about the 4 warning signs for APA (2 are significant!) that we have uncovered.
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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.
