APA (APA) is expected to deliver solid operational execution across its Permian Basin and Egypt assets in Q1, supported by stronger gas marketing results and disciplined capital spending, RBC Capital said in a Friday quarterly preview note.

According to the report, stronger liquefied natural gas pricing and Permian firm transportation agreements are expected to boost gas marketing gains, offsetting weaker regional prices, with RBC estimating about $353 million in free cash flow, broadly in line on earnings.

RBC noted that APA is likely to maintain a steady capital program despite higher oil prices, focusing on operational consistency and free cash flow generation, while continuing cost optimization efforts beyond the $350 million already achieved.

Shareholder returns are expected to be weighted toward buybacks later in 2026, with near-term repurchases subdued as APA prioritizes balance sheet strength, while still targeting around 60% of free cash flow returned over time.

RBC maintained its sector perform rating on the stock with a $45 price target.

Shares of APA were up 1.7% in Monday trading.

Price: 36.32, Change: +0.58, Percent Change: +1.62