APA's (APA) operational performance continues to trend above expectations, delivering better production and lower costs relative to expectations, RBC Capital Markets analysts said in a Friday note.

Analysts said APA benefits from the volatile macro environment, which is driving better oil price realizations and gas marketing income.

RBC said the company's shareholder returns were limited in Q1, with APA prioritizing the balance sheet, but management remains committed to at least a 60% annual free cash flow return.

Analysts said APA's shares are likely to perform in line with its peer group over the next 12 months.

RBC has a sector perform rating and a $45 price target on the stock.

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