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Can Pioneer Natural Resources (PXD) Run Higher on Rising Earnings Estimates?

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  • PXD

Investors might want to bet on Pioneer Natural Resources (PXD), as earnings estimates for this company have been showing solid improvement lately. The stock has already gained solid short-term price momentum, and this trend might continue with its still improving earnings outlook.

The upward trend in estimate revisions for this independent oil and gas company reflects growing optimism of analysts on its earnings prospects, which should get reflected in its stock price. After all, empirical research shows a strong correlation between trends in earnings estimate revisions and near-term stock price movements. Our stock rating tool -- the Zacks Rank -- is principally built on this insight.

The five-grade Zacks Rank system, which ranges from a Zacks Rank #1 (Strong Buy) to a Zacks Rank #5 (Strong Sell), has an impressive externally-audited track record of outperformance, with Zacks #1 Ranked stocks generating an average annual return of +25% since 2008.

For Pioneer Natural Resources, strong agreement among the covering analysts in revising earnings estimates upward has resulted in meaningful improvement in consensus estimates for the next quarter and full year.

The chart below shows the evolution of forward 12-month Zacks Consensus EPS estimate:

12 Month EPS

Current-Quarter Estimate Revisions

The company is expected to earn $3.96 per share for the current quarter, which represents a year-over-year change of +2229.41%.

Over the last 30 days, six estimates have moved higher for Pioneer Natural Resources while two have gone lower. As a result, the Zacks Consensus Estimate has increased 12.88%.

Current-Year Estimate Revisions

The company is expected to earn $13.25 per share for the full year, which represents a change of +707.93% from the prior-year number.

The revisions trend for the current year also appears quite promising for Pioneer Natural Resources, with eight estimates moving higher over the past month compared to no negative revisions. The consensus estimate has also received a boost over this time frame, increasing 5.29%.

Favorable Zacks Rank

Thanks to promising estimate revisions, Pioneer Natural Resources currently carries a Zacks Rank #2 (Buy). The Zacks Rank is a tried-and-tested rating tool that helps investors effectively harness the power of earnings estimate revisions and make the right investment decision. You can see the complete list of today's Zacks #1 Rank (Strong Buy) stocks here.

Our research shows that stocks with Zacks Rank #1 (Strong Buy) and 2 (Buy) significantly outperform the S&P 500.

Bottom Line

Investors have been betting on Pioneer Natural Resources because of its solid estimate revisions, as evident from the stock's 13.2% gain over the past four weeks. As its earnings growth prospects might push the stock higher, you may consider adding it to your portfolio right away.

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Pioneer Natural Resources Company (PXD) : Free Stock Analysis Report

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