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Why Pioneer Natural Resources (PXD) Might be Well Poised for a Surge

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Zacks Equity Research
·2 min read
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Pioneer Natural Resources (PXD) could be a solid addition to your portfolio given a notable revision in the company's earnings estimates. While the stock has been gaining lately, the trend might continue since its earnings outlook is still improving.

Analysts' growing optimism on the earnings prospects of this independent oil and gas company is driving estimates higher, 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, there has been strong agreement among the covering analysts in raising earnings estimates, which has helped push consensus estimates considerably higher 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

For the current quarter, the company is expected to earn $1.75 per share, which is a change of +52.17% from the year-ago reported number.

Over the last 30 days, four estimates have moved higher for Pioneer Natural Resources while two have gone lower. As a result, the Zacks Consensus Estimate has increased 7.86%.

Current-Year Estimate Revisions

For the full year, the company is expected to earn $8.67 per share, representing a year-over-year change of +428.66%.

In terms of estimate revisions, the trend for the current year also appears quite encouraging for Pioneer Natural Resources. Over the past month, eight estimates have moved higher compared to one negative revision, helping the consensus estimate increase 23.95%.

Favorable Zacks Rank

Thanks to promising estimate revisions, Pioneer Natural Resources currently carries a Zacks Rank #1 (Strong 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

Pioneer Natural Resources shares have added 25.2% over the past four weeks, suggesting that investors are betting on its impressive estimate revisions. So, you may consider adding it to your portfolio right away to benefit from its earnings growth prospects.


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