Here's Why Pioneer Natural (PXD) is an Attractive Bet Now
Pioneer Natural Resources Company PXD has witnessed upward estimate revisions for 2020 and 2021 earnings in the past 60 days. In fact, seven out of nine analysts have revised their earnings estimates upward for 2020, while all 10 analysts have done the same for 2021.
Factors Working in Favor
The company, currently carrying Zacks Rank #2 (Buy), is a pure-play Permian basin producer. In the Midland sub-basin, the company has the largest acreage position with huge inventory of drilling locations. In the Permian, the most prolific basin in the United States, Pioneer Natural has roughly 680,000 net acres of land, comprising low cost and premium horizontal wells, brightening up the company’s production outlook.
Despite low oil price with the coronavirus pandemic denting global energy demand, Pioneer Natural could generate free cashflow of $165 million in the June quarter of 2020. The company also expects to generate $600 million of free cashflow in 2020. Thus, the company is not only focusing on generating free cashflow but is also creating considerable value for shareholders.
Pioneer Natural also has a strong balance sheet to survive the pandemic. The company’s debt-to-capitalization ratio of 0.16 is significant below the industry’s 0.45. Thus, the leading oil and gas exploration and production company has significantly lower debt exposure than the composite stocks belonging to the industry.
Moreover, declining controllable cash costs – comprising mostly lease operating expenses along with general and administrative expense – per barrel of oil equivalent (BoE) is aiding the company’s bottom line. As compared to $5.81 of controllable cash costs per BoE in 2019, the company lowered expenses to $4.11 in the second quarter of 2020, suggesting a decline of almost 30%.
Pioneer Natural Resources Company Price
Pioneer Natural Resources Company price | Pioneer Natural Resources Company Quote
Other Stocks to Consider
Other prospective players in the energy space are SilverBow Resources, Inc. SBOW, Concho Resources Inc. CXO and Murphy Oil Corporation MUR, each holding a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
SilverBow has seen upward earnings estimate revisions for 2020 in the past 60 days.
Concho is likely to see earnings growth of 21.6% in 2020.
Murphy’s 2020 bottom-line estimates have been revised upward over the past 30 days.
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Pioneer Natural Resources Company (PXD) : Free Stock Analysis Report
Murphy Oil Corporation (MUR) : Free Stock Analysis Report
Concho Resources Inc. (CXO) : Free Stock Analysis Report
SilverBow Resources Inc. (SBOW) : Free Stock Analysis Report
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