U.S. Markets open in 1 hr 58 mins

What Do Analysts Think About The Future Of Pioneer Natural Resources Company’s (NYSE:PXD)?

Miguel Kauffman

Want to participate in a short research study? Help shape the future of investing tools and receive a $20 prize!

In December 2018, Pioneer Natural Resources Company (NYSE:PXD) released its latest earnings announcement, which indicated that the business benefited from a robust tailwind, eventuating to a double-digit earnings growth of 18%. Below is a brief commentary on my key takeaways on how market analysts predict Pioneer Natural Resources’s earnings growth trajectory over the next couple of years and whether the future looks even brighter than the past. Note that I will be looking at net income excluding extraordinary items to get a better understanding of the underlying drivers of earnings.

View our latest analysis for Pioneer Natural Resources

Analysts’ expectations for the coming year seems buoyant, with earnings expanding by a robust 26%. This growth seems to continue into the following year with rates arriving at double digit 65% compared to today’s earnings, and finally hitting US$2.2b by 2022.

NYSE:PXD Future Profit February 19th 19

While it is useful to be aware of the growth each year relative to today’s figure, it may be more beneficial analyzing the rate at which the company is moving every year, on average. The pro of this technique is that we can get a better picture of the direction of Pioneer Natural Resources’s earnings trajectory over the long run, irrespective of near term fluctuations, which may be more relevant for long term investors. To calculate this rate, I’ve appended a line of best fit through the forecasted earnings by market analysts. The slope of this line is the rate of earnings growth, which in this case is 21%. This means that, we can assume Pioneer Natural Resources will grow its earnings by 21% every year for the next couple of years.

Next Steps:

For Pioneer Natural Resources, I’ve put together three fundamental aspects you should look at:

  1. Financial Health: Does it have a healthy balance sheet? Take a look at our free balance sheet analysis with six simple checks on key factors like leverage and risk.
  2. Valuation: What is PXD worth today? Is the stock undervalued, even when its growth outlook is factored into its intrinsic value? The intrinsic value infographic in our free research report helps visualize whether PXD is currently mispriced by the market.
  3. Other High-Growth Alternatives: Are there other high-growth stocks you could be holding instead of PXD? Explore our interactive list of stocks with large growth potential to get an idea of what else is out there you may be missing!

We aim to bring you long-term focused research analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material.

If you spot an error that warrants correction, please contact the editor at editorial-team@simplywallst.com. This article by Simply Wall St is general in nature. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. Simply Wall St has no position in the stocks mentioned. On rare occasion, data errors may occur. Thank you for reading.