Apache Corporation explores, develops, and produces natural gas, crude oil, and natural gas liquids in the Permian Basin, the Anadarko basin in western Oklahoma, and the Texas Panhandle, Gulf Coast areas of the United States, as well as in Western Canada. The company was founded in 1954 and is based in Houston, Texas.
APA Price Forecast Based on DCF Valuation
DCF Fair Value Target:
We started the process of determining a valid price forecast for Apache Corp with a discounted cash flow analysis -- the results of which can be found in the table below. To summarize, we found that Apache Corp ranked in the 54th percentile in terms of potential gain offered. Specifically, our DCF analysis implies the stock is trading below its fair value by an estimated 32%. The most interesting components of our discounted cash flow analysis for Apache Corp ended up being:
35% of the company's capital comes from equity, which is greater than merely 18.53% of stocks in our cash flow based forecasting set.
Apache Corp's interest coverage rate -- a measure of gross earnings relative to interest payments -- comes in at -14.74. This coverage rate is greater than that of just 6.54% of stocks we're observing for the purpose of forecasting via discounted cash flows.
As a business, Apache Corp experienced a tax rate of about 0% over the past twelve months; relative to its sector (Energy), this tax rate is higher than merely 0% of stocks generating free cash flow.
Terminal Growth Rate in Free Cash Flow
Return Relative to Current Share Price
NSFDF, CVI, DCP, PHX, and BTE can be thought of as valuation peers to APA, in the sense that they are in the Energy sector and have a similar price forecast based on DCF valuation.
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Apache (APA) pares gains after StreetInsider reports that the company is exploring a potential bid for Premier Oil ([[PMOIF]] +3.9%) ([[PMOIY]] +4.8%) in the U.K.Apache, recently up 2.7%, had risen as much as 7.2% earlier in the session....
The Dividend Dirty Dogs Risk Research Inc. publishes a list of one hundred dividend-paying stocks that don’t cover their payout with free cash flow, and must thus borrow or dilute shareholders, or draw down liquidity, to cover the shortfall. We report weekly on these companies. Almost all have deteriorating financial...
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