Benchmark has initiated coverage of APA Corp. with a Buy recommendation and a price target of $46, stating that the company’s stock has significant potential for leverage in the event of a recovery in global energy prices. APA Corp., whose ticker symbol is APA, saw its stock rise by 2.8% in Thursday’s trading following the announcement.
Analyst Subash Chandra from Benchmark noted that APA Corp.’s domestic assets are a source of free cash flow, while its Suriname development is nearing a declaration of commerciality. Chandra believes that as the stock price increasingly reflects the potential of the Suriname assets, APA Corp.’s below-average EV/EBITDA multiple will rise.
Chandra is also positive on other energy companies. Diamondback Energy, with the ticker symbol FANG, has been given a Buy rating and a price target of $154. Chandra praised the company’s focused operations, improving well productivity, and high free cash flow per flowing barrel. He also highlighted Diamondback’s generous and flexible return of capital formula, which primarily focuses on share buybacks rather than variable dividends.
Permian Resources, with the ticker symbol PR, has also received a Buy rating from Benchmark. Chandra believes that the company is undervalued compared to its low-cost structure, Delaware concentration, disciplined strategy, focus on free cash flow, and enviable track record.
Benchmark’s positive outlook on these energy companies demonstrates a belief in their potential for growth and profitability. APA Corp., Diamondback Energy, and Permian Resources all offer unique qualities and opportunities within the energy sector.
While it is crucial to note the analysts’ perspectives and recommendations, it is essential to conduct thorough research and analysis before making any investment decisions. Market conditions and individual company performance can vary, and it is always wise to consult with a financial advisor or conduct further research to gain a comprehensive understanding of the investment landscape.
