Johnson Rice has upgraded APA Corporation (APA) to 'Accumulate' and increased its price target to $65, signaling stronger confidence in the energy company's near-term performance and long-term value. The move reflects improved fundamentals and favorable industry dynamics.
- Johnson Rice upgraded APA Corporation (APA) to 'Accumulate' from 'Hold' on December 9, 2025.
- Price target raised to $65 per share, implying a 22% upside from $53.30 closing price.
- APA reported $2.4 billion in adjusted EBITDA over the past 12 months.
- Free cash flow conversion rate exceeded 85% in the same period.
- Dividend yield stands at 3.7%, with a commitment to maintain debt-to-EBITDA below 1.5x.
- Permian Basin operations remain a core driver of production growth and cost efficiency.
Johnson Rice has upgraded APA Corporation (APA) to 'Accumulate' from 'Hold,' marking a strategic shift in its investment stance on the oil and gas explorer. The brokerage firm also raised its price target to $65 per share, representing a 22% upside from APA’s closing price of $53.30 on December 8, 2025. This upgrade follows a reevaluation of APA’s asset quality, cash flow generation, and capital efficiency across its U.S. onshore operations. The firm cited APA’s consistent production growth, particularly in the Permian Basin, and its disciplined capital allocation strategy as key drivers behind the upgraded rating. APA reported adjusted EBITDA of $2.4 billion for the trailing twelve months, with a free cash flow conversion rate above 85%, underscoring its ability to generate robust returns even in a moderate oil price environment. The company’s current dividend yield of 3.7% further enhances its appeal to income-focused investors. Market reaction has been positive, with APA’s stock rising 2.1% in early trading on December 9, 2025. The upgrade is expected to influence institutional portfolio allocations, particularly in energy equities with strong balance sheets and low breakeven costs. Analysts note that APA’s low finding and development costs—under $10 per barrel equivalent—position it favorably for future growth in a capital-constrained environment. Investor attention is now focused on APA’s 2026 production guidance, which is expected to be announced in early Q1 2026. The company has committed to maintaining a debt-to-EBITDA ratio below 1.5x, a threshold that aligns with Johnson Rice’s risk assessment framework.