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Growth Investors: Industry Analysts Just Upgraded Their Pioneer Natural Resources Company (NYSE:PXD) Revenue Forecasts By 12%

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Simply Wall St
·3 min read
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Shareholders in Pioneer Natural Resources Company (NYSE:PXD) may be thrilled to learn that the analysts have just delivered a major upgrade to their near-term forecasts. The analysts have sharply increased their revenue numbers, with a view that Pioneer Natural Resources will make substantially more sales than they'd previously expected.

Following the upgrade, the latest consensus from Pioneer Natural Resources' 19 analysts is for revenues of US$8.4b in 2021, which would reflect a decent 10% improvement in sales compared to the last 12 months. Statutory earnings per share are presumed to shoot up 368% to US$4.92. Before this latest update, the analysts had been forecasting revenues of US$7.5b and earnings per share (EPS) of US$4.82 in 2021. The forecasts seem more optimistic now, with a decent improvement in revenue and a small lift in earnings per share estimates.

Check out our latest analysis for Pioneer Natural Resources

earnings-and-revenue-growth
earnings-and-revenue-growth

Despite these upgrades, the analysts have not made any major changes to their price target of US$127, suggesting that the higher estimates are not likely to have a long term impact on what the stock is worth. That's not the only conclusion we can draw from this data however, as some investors also like to consider the spread in estimates when evaluating analyst price targets. Currently, the most bullish analyst values Pioneer Natural Resources at US$162 per share, while the most bearish prices it at US$95.00. These price targets show that analysts do have some differing views on the business, but the estimates do not vary enough to suggest to us that some are betting on wild success or utter failure.

One way to get more context on these forecasts is to look at how they compare to both past performance, and how other companies in the same industry are performing. It's pretty clear that there is an expectation that Pioneer Natural Resources' revenue growth will slow down substantially, with revenues next year expected to grow 10%, compared to a historical growth rate of 24% over the past five years. Juxtapose this against the other companies in the industry with analyst coverage, which are forecast to grow their revenues (in aggregate) 11% next year. So it's pretty clear that, while Pioneer Natural Resources' revenue growth is expected to slow, it's expected to grow roughly in line with the industry.

The Bottom Line

The most important thing to take away from this upgrade is that analysts upgraded their earnings per share estimates for next year, expecting improving business conditions. There was also an upgrade to revenue estimates, although as we saw earlier, forecast growth is only expected to be about the same as the wider market. Seeing the dramatic upgrade to next year's forecasts, it might be time to take another look at Pioneer Natural Resources.

Even so, the longer term trajectory of the business is much more important for the value creation of shareholders. At Simply Wall St, we have a full range of analyst estimates for Pioneer Natural Resources going out to 2023, and you can see them free on our platform here..

Another way to search for interesting companies that could be reaching an inflection point is to track whether management are buying or selling, with our free list of growing companies that insiders are buying.

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. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team@simplywallst.com.