News Flash: Analysts Just Made A Sizeable Upgrade To Their Pioneer Natural Resources Company (NYSE:PXD) Forecasts
Celebrations may be in order for Pioneer Natural Resources Company (NYSE:PXD) shareholders, with the analysts delivering a significant upgrade to their statutory estimates for the company. The revenue forecast for next year has experienced a facelift, with analysts now much more optimistic on its sales pipeline. Pioneer Natural Resources has also found favour with investors, with the stock up a worthy 16% to US$131 over the past week. Could this upgrade be enough to drive the stock even higher?
Following the upgrade, the latest consensus from Pioneer Natural Resources' 14 analysts is for revenues of US$10b in 2021, which would reflect a substantial 34% improvement in sales compared to the last 12 months. Statutory earnings per share are presumed to bounce 459% to US$5.87. Previously, the analysts had been modelling revenues of US$9.2b and earnings per share (EPS) of US$5.24 in 2021. So we can see there's been a pretty clear increase in analyst sentiment in recent times, with both revenues and earnings per share receiving a decent lift in the latest estimates.
View our latest analysis for Pioneer Natural Resources
Although the analysts have upgraded their earnings estimates, there was no change to the consensus price target of US$139, suggesting that the forecast performance does not have a long term impact on the company's valuation. 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$201 per share, while the most bearish prices it at US$106. This is a fairly broad spread of estimates, suggesting that the analysts are forecasting a wide range of possible outcomes for the business.
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 clear from the latest estimates that Pioneer Natural Resources' rate of growth is expected to accelerate meaningfully, with the forecast 34% revenue growth noticeably faster than its historical growth of 24% p.a. over the past five years. By contrast, our data suggests that other companies (with analyst coverage) in a similar industry are forecast to grow their revenue at 9.1% per year. It seems obvious that, while the growth outlook is brighter than the recent past, the analysts also expect Pioneer Natural Resources to grow faster than the wider 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. Fortunately, analysts also upgraded their revenue estimates, and our data indicates sales are expected to perform better than 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. We have estimates - from multiple Pioneer Natural Resources analysts - going out to 2024, and you can see them free on our platform here.
Of course, seeing company management invest large sums of money in a stock can be just as useful as knowing whether analysts are upgrading their estimates. So you may also wish to search this free list of stocks 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.
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