APA Corporation (NASDAQ:APA) Just Beat Earnings: Here's What Analysts Think Will Happen Next

APA Corporation (NASDAQ:APA) defied analyst predictions to release its first-quarter results, which were ahead of market expectations. It was a decent earnings report, with revenues and statutory earnings per share (EPS) both performing well. Revenues were 19% higher than the analysts had forecast, at US$2.6b, while EPS of US$0.96 beat analyst models by 19%. 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. So we collected the latest post-earnings statutory consensus estimates to see what could be in store for next year.

We've discovered 2 warning signs about APA. View them for free.

Taking into account the latest results, the 16 analysts covering APA provided consensus estimates of US$8.43b revenue in 2025, which would reflect an uncomfortable 17% decline over the past 12 months. Per-share earnings are expected to bounce 22% to US$3.44. Before this earnings report, the analysts had been forecasting revenues of US$8.53b and earnings per share (EPS) of US$3.15 in 2025. So the consensus seems to have become somewhat more optimistic on APA's earnings potential following these results.

See our latest analysis for APA

The consensus price target was unchanged at US$22.84, implying that the improved earnings outlook is not expected to have a long term impact on value creation for shareholders. The consensus price target is just an average of individual analyst targets, so - it could be handy to see how wide the range of underlying estimates is. The most optimistic APA analyst has a price target of US$36.00 per share, while the most pessimistic values it at US$13.00. So we wouldn't be assigning too much credibility to analyst price targets in this case, because there are clearly some widely different views on what kind of performance this business can generate. With this in mind, we wouldn't rely too heavily the consensus price target, as it is just an average and analysts clearly have some deeply divergent views on the business.

These estimates are interesting, but it can be useful to paint some more broad strokes when seeing how forecasts compare, both to the APA's past performance and to peers in the same industry. These estimates imply that revenue is expected to slow, with a forecast annualised decline of 22% by the end of 2025. This indicates a significant reduction from annual growth of 12% over the last five years. Compare this with our data, which suggests that other companies in the same industry are, in aggregate, expected to see their revenue grow 3.5% per year. It's pretty clear that APA's revenues are expected to perform substantially worse than the wider industry.

The Bottom Line

The most important thing here is that the analysts upgraded their earnings per share estimates, suggesting that there has been a clear increase in optimism towards APA following these results. Fortunately, the analysts also reconfirmed their revenue estimates, suggesting that it's tracking in line with expectations. Although our data does suggest that APA's revenue is expected to perform worse than the wider industry. There was no real change to the consensus price target, suggesting that the intrinsic value of the business has not undergone any major changes with the latest estimates.

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. At Simply Wall St, we have a full range of analyst estimates for APA going out to 2027, and you can see them free on our platform here..

Plus, you should also learn about the 2 warning signs we've spotted with APA .

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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.