Anadarko Petroleum Ranks Seventh in Terms of Cash Flow Growth


Dec. 4 2020, Updated 10:52 a.m. ET

Cash flow from operations growth

So far in this series, we’ve looked into the cash flow from operations growth expectations for six upstream companies: Hess Corporation (HES), Penn Virginia (PVAC), Centennial Resource Development (CDEV), WPX Energy (WPX), ConocoPhillips (COP), and Whiting Petroleum (WLL).

In this article, we’ll look into the cash flow growth expectations of Anadarko Petroleum (APC).

Anadarko Petroleum is expected to post 171.6% YoY cash flow from operations growth in the third quarter. This strong YoY cash flow from operations growth is expected to be driven by a marked increase in US onshore volumes, higher realized sales prices, and operating margin improvement. For 2018, analysts expect APC to post cash flow from operations growth of 60.5%. The company was trading at a price-to-cash flow from operations multiple of 5.3x on October 17, slightly higher than the industry median of 5.2x.

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Analysts’ recommendations

A total of 82.8% of analysts call APC a “buy,” and the remaining 17.2% call it a “hold.” Barclays last initiated coverage on APC with an “overweight” rating, which is equivalent to a “buy.” Overall, APC has seen six rating updates since the start of this year, including five new coverage initiations and one downgrade. APC is currently trading below the low range ($70) of analysts’ target price. Its average target price of $86.7 offers a ~30% potential upside from its current price level.


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