Shares in APA Group (ASX: APA) are nudging higher today and now trade 1% in the green at $10.03 apiece.
APA shares have traded sideways for the past two months and haven't budged since trading restarted in January.
That trend is fairly consistent across the board, but whilst shares are up just 2% in the past 12 months, they have snapped back hard since last October and bounced from a low of $8.21 per share.
After a solid set of interim results, the company has attracted the attention of analysts who are digesting their next moves on the stock.
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Are upgrades on the way for APA shares?
According to analysts at JP Morgan, the group's solid result is "likely to lead to consensus upgrades". The broker said that APA released a robust set of results, where EBITDA returned to growth and the organic pipeline continued to build out.
These results are sure to weigh in positively on its share price and the rating analysts assign to their valuations, it said.
"APA released solid interim financials with EBITDA growing 4% and tracking ahead of consensus for the year", the broker said. "We still expect market upgrades due to the result".
Whilst the interim dividend of 25 cents was "slightly below expectations and below normal payout ranges", management still affirmed its full-year dividend guidance of 53 cents per share in the report.
"Free cash flow of A$515 million was impressive at an annualised yield of 9%", the broker added.
Not only that, but APA's recent closure of baseload plants is likely to be a net positive for gas use in power generation, and the group is looking to repurpose its Parmelia gas pipeline for hydrogen.
These initiatives could also be an avenue to extend the useful lives of its key assets, something JP Morgan said should lay to rest investor concerns over the group's remaining gas pipeline.
However, whilst JP Morgan reckons consensus upgrades are on the way, it hasn't moved an inch on its valuation or rating on the stock.
It still rates APA Group as a hold/neutral with a $10.50 per share valuation on the company and is joined by 6 other brokers in their hold rating.
APA Group share price summary
In the last 12 months, the APA share price has gained just 2% and is flat on the year to date as well. During the previous single month of trading, shares have walked another 2% in the green, and are up 1% on the previous week.
