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Bull of the Day: Pioneer Natural Resources (PXD)

Zacks

Pioneer Natural Resources (PXD), a Zacks Rank #1 (Strong Buy) is a large, Texas-based independent exploration and production company that is focused on helping to meet the world's energy needs. Pioneer Natural Resources deliver industry-leading production and reserve growth through onshore, unconventional, oil and gas resource development in the United States, while providing opportunities for growth and enrichment for business partners, employees and the communities in which operate. The company provides administrative, financial and management support to United States and foreign subsidiaries that explore for, develop and produce oil, natural gas liquid and natural gas reserves.

Recent Earnings Data

The company recently reported Q4 earnings results where they beat the Zacks consensus earnings estimate for the eleventh consecutive quarter, but missed the revenue estimate for the first time in six quarters. The report was very impressive with EPS and Revenues improving by +149%, and +30.7% year over year respectively. The company also saw oil production rise by +11% YoY, as they placed 64 horizontal wells in the Permian Basis during the quarter. Lastly, the company’s balance sheet remained strong with $2.2 billion cash on hand.

Positives Going Forward

In 2018, management expects to place between 250-275 wells in production in the Permian Basin, with about 45 of those wells to be Version 3.0+ (its top producing, and newest well designs) in the first half of the year. Due to the increased wells, the company now expects Permian Basin oil production growth for +19-24% in the year. Further, due to its strong cash position, management plans on increasing semiannual per share dividend from $0.04 to $0.16; $0.32 per share on an annualized basis.

Management’s Take

According to Timothy L. Dove, President and CEO, “The Company delivered another excellent quarter, with strong earnings, solid execution, robust oil production growth, excellent horizontal well performance in the Permian Basin and reduced production costs. Our world-class Permian Basin asset is considered by many to be the top oil shale play in North America. We are drilling low-cost, highly productive wells that generate high rates of return as a result of a low all-in cost structure of approximately $19 per barrel.

Stock Price and Earnings Consensus Graph

As you can see in the graph below, the stock price has been on a recent upswing, and future earnings estimates have increased.

Pioneer Natural Resources Company Price and Consensus

Pioneer Natural Resources Company Price and Consensus | Pioneer Natural Resources Company Quote

Increasing Earnings Estimates

Over the past 30 days earnings estimates for Q1 18, Q2 18, FY 18 and FY 19 have all see positive estimate revisions; Q1 18 improved from $0.93 to $1.26, Q2 18 rose from $0.91 to $1.34, FY 18 jumped up from $3.79 to $5.46, and FY 19 was lifted from $5.72 to $8.04.

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