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The Zacks Analyst Blog Highlights: Pioneer Natural Resources, EOG Resources, Matador Resources, Diamondback Energy and Callon Petroleum

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Zacks Equity Research
·6 min read
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For Immediate Release

Chicago, IL – March 15, 2021 – Zacks.com announces the list of stocks featured in the Analyst Blog. Every day the Zacks Equity Research analysts discuss the latest news and events impacting stocks and the financial markets. Stocks recently featured in the blog include: Pioneer Natural Resources Company PXD, EOG Resources, Inc. EOG, Matador Resources Company MTDR, Diamondback Energy, Inc. FANG and Callon Petroleum Company CPE.

Here are highlights from Friday’s Analyst Blog:

U.S. Economy Recovering Faster than Expected: Oil Firms to Gain

President Joe Biden expects Americans to get closer to normal life soon, as early as by the Fourth of July. Thus, more people will soon join offices and travel more, boosting demand for fuel. With fuel demand mostly dictating the fate of energy companies, it seems to be an opportune moment for investors to invest in oil stocks.

Encouraging US Economic Growth Outlook

According to the Organisation for Economic Co-operation and Development (OECD), the U.S. economy will grow 6.5% in 2021. The forecast issued in December was pegged at 3.2%. OECD also lifted its estimate for U.S. economic growth for 2022 to 4% from 3.5%.

Notably, the rollout of vaccines in a massive scale and the stimulus package boosted the economic growth forecast. Biden has outlined a plan to widen the eligibility criteria of coronavirus vaccinations for all adults by May 1. This will likely bring the country very close to normalcy by the Independence Day weekend, Biden added. Notably, the news that Biden has signed the stimulus bill of $1.9 trillion into law has also brightened the country’s economic outlook.

Room for Further Oil Price Recovery

Encouraging outlook for U.S. economic growth has paved the way for further oil price recovery on the back of improving demand for fuel. In fact, the commodity price, which is trading above $65 per barrel (at pre-pandemic levels), has improved significantly since April 2020, when oil was in the negative territory.

Recently, the price of oil jumped to record levels in more than a year after it was decided by OPEC+ (OPEC and its non-OPEC partners) that they will extend most of the oil output cuts till April.

Energy Business to Bounce Back

Rising oil price is definitely a boon for oil explorers and producers. Upstream energy players, in fact, have started returning to shale plays. With exploration and production activities ramping up and a bright outlook for upstream businesses, energy companies are well-poised to bounce back from pandemic-lows with room for generating handsome cashflow. This, in turn, is likely to have paved the way for upstream energy players to reward investors with lucrative dividend payments again.

Notably, two of the major exploration and production companies that recently announced dividend hikes are Pioneer Natural Resources Co. and EOG Resources.

Stocks to Buy

Given that the bright U.S. economic outlook signals higher fuel demand, investors are likely to gain lucrative returns from energy sector investments. However, it would be a daunting task to pick the right company where our proprietary stock screener comes in handy. Based on the screening criteria the companies will either carry a Zacks Rank #1 (Strong Buy) or 2 (Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

Headquartered in Dallas, TX, Matador Resources Co. has a strong footprint in liquid-rich Delaware Basin’s Wolfcamp and Bone Spring plays. Thus, the crude rally will likely aid the company’s bottom line. In fact, the Zacks Rank #1 stock has witnessed upward earnings estimate revisions for 2021 over the past 30 days.

Headquartered in Midland, TX, Diamondback Energy is a pure-play Permian player with presence in more than 347,000 net acres in the Permian. The company has more than 12,300 gross horizontal locations, brightening its production outlook amid the favorable crude pricing scenario. Notably, the Zacks #1 Ranked stock is likely to see earnings growth of 99.7% in 2021.

Pioneer Natural Resources, headquartered in Irving, TX, recently announced approval from its board of directors to raise its quarterly cash dividend payout. Importantly, in 2020, the Zacks #2 Ranked company delivered free cashflow of $689 million and the metric will likely improve with the business scenario gradually getting better on rising oil prices.

Notably, Pioneer projects free cashflow for 2021 at $2 billion. Thus, the upstream energy company, with a strong presence in the Permian, will likely continue to reward investors with dividend payments.

Headquartered in Houston, TX, CallonPetroleum Co.’s strong presence in the Permian Basin, which is among the country’s most prolific oil plays, is commendable. The company, with a Zacks Rank of 2, is well poised to capitalize on the crude price recovery and has witnessed upward earnings estimate revisions for 2021 in the past 30 days.

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Past performance is no guarantee of future results. Inherent in any investment is the potential for loss. This material is being provided for informational purposes only and nothing herein constitutes investment, legal, accounting or tax advice, or a recommendation to buy, sell or hold a security. No recommendation or advice is being given as to whether any investment is suitable for a particular investor. It should not be assumed that any investments in securities, companies, sectors or markets identified and described were or will be profitable. All information is current as of the date of herein and is subject to change without notice. Any views or opinions expressed may not reflect those of the firm as a whole. Zacks Investment Research does not engage in investment banking, market making or asset management activities of any securities. These returns are from hypothetical portfolios consisting of stocks with Zacks Rank = 1 that were rebalanced monthly with zero transaction costs. These are not the returns of actual portfolios of stocks. The S&P 500 is an unmanaged index. Visit https://www.zacks.com/performance for information about the performance numbers displayed in this press release.


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Pioneer Natural Resources Company (PXD) : Free Stock Analysis Report
 
EOG Resources, Inc. (EOG) : Free Stock Analysis Report
 
Diamondback Energy, Inc. (FANG) : Free Stock Analysis Report
 
Callon Petroleum Company (CPE) : Free Stock Analysis Report
 
Matador Resources Company (MTDR) : Free Stock Analysis Report
 
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