Pioneer Natural Resources Company (PXD)
- Bloomberg
Oil Surges to Highest in a Month With U.S. Demand Picking Up
(Bloomberg) -- Oil surged to the highest level in a month -- breaking out of a weeks-long holding pattern -- as shrinking crude stockpiles in the U.S. supported hopes for a global demand recovery.Futures rose 4.9% in New York, the most since late March, after trading in a $5 range for weeks. U.S. crude inventories are at the lowest since February following the biggest decline in two months, according to the Energy Information Administration. At the same time, a gauge for gasoline demand ticked higher for a seventh straight week. That’s helped prices that have struggled to rally past $60 a barrel.“There’s always bearish factors in any market, but now that we’ve broke out to the upside, it likely means we’re going to retest the old highs, if not go through them,” said Bill O’Grady, executive vice president at Confluence Investment Management in St. Louis.See also: U.S. Oil Demand Picks Up Steam as Economic Expansion QuickensBoth U.S. and global benchmark crude futures have also topped their 50-day moving averages.The stronger outlook for U.S. demand, along with improvements in China, earlier drove the International Energy Agency to lift its forecast for oil consumption this year. The IEA report follows similar moves by the U.S. Energy Information Administration and the Organization of Petroleum Exporting Countries to increase demand estimates for 2021. All three pointed to an improving economic outlook and the rapid roll-out of vaccines, particularly in the U.S.The EIA report showed the four-week rolling average of U.S. gasoline supplied has been on a multi-week climb back toward 9 million barrels a day, while refineries have been processing crude at the highest level since the early days of the pandemic. That comes as New York City toll traffic is set for its busiest April in at least seven years, while some see nationwide gasoline consumption having a record summer.A measure of jet fuel demand topped 1 million barrels a day last week for the fifth straight week, as Transportation Security Administration daily passenger data shows foot traffic above the 1 million every day since early March.“The crude draw and the very slight increase in gasoline inventories speaks to the whole setup of recovering demand and balancing inventories,” said Quinn Kiley, a portfolio manager at Tortoise, a firm that manages roughly $8 billion in energy-related assets. “It’s a stark difference compared to this time last year.”It’s not just the U.S. that’s seeing green shoots of a return to normal consumption. Data from the U.K. showed road use was at 91% of pre-pandemic levels on Monday, the strongest daily reading since November. Meanwhile, in lifting its demand outlook, the IEA noted strength in other key demand hubs. Japan, for example, saw its oil demand top pre-pandemic levels for the second month in a row in February.For more articles like this, please visit us at bloomberg.comSubscribe now to stay ahead with the most trusted business news source.©2021 Bloomberg L.P.
- TipRanks
Raymond James Predicts Over 60% Rally for These 2 Stocks
Bouncing back with incredible force, the S&P 500 has gained 50% over the past 12 months, with the index now landing just shy of its 52-week high. This impressive charge forward has come as investors shrug off COVID-19’s devastating impact on the economy. Going ahead, Raymond James strategist Tavis McCourt believes we’re looking at a prolonged period of higher interest rates, higher taxes, and abundant economic growth. "[It] seems very likely the puck is going to be in a very strong economy, low unemployment, with higher long term rates, and likely higher tax rates in the next 6-12 months. The bias for EPS this year is likely higher as re-openings occur, as any EPS misses are likely to be driven by supply issues or inflation, not lack of demand," McCourt noted. Sustained improvement in the economic indicators paint a rosy picture, and McCourt believes that some of the potential negatives (the Biden Administration’s policy preference toward higher tax rates, for example) are already priced in. As the tide rises, we remember one of JFK’s famous lines: “A rising tide lifts all boats.” We’ll take a look at a piece of that rising tide, through the stock picks by some of McCourt’s Raymond James colleagues. They’ve pointed out equities with upwards of 60% gains in store for the year ahead. After running the tickers through TipRanks’ database, it’s clear the rest of the Street is in agreement, with each earning a “Strong Buy” consensus rating. Pioneer Natural Resources (PXD) We’ll start in Texas, in the oil patch of the Permian Basin, where Pioneer Natural Resources is a major landholder and hydrocarbon exploration and extraction company. Pioneer has over 1.27 billion barrels of oil equivalent in proven reserves on its holdings; that number includes 357 million barrels added through exploration in 2020. Operations on its holdings yielded Q4 earnings of $1.07 per share, beating consensus estimates of $0.69 per share. For the full-year 2020, Pioneer reported a net loss of $1.21 per share; this number was heavily impacted by disruptions due to the COVID pandemic crisis. Furthermore, 2020 saw operating cash flow reach $2.1 billion, with a free cash flow of $689 million. The company used that free cash flow to fund a capital return program totaling $521 million. A large part of the capital return is made through the company dividend, which in the last declaration was raised one penny to 56 cents per common share, paid quarterly. The company has built on its solid position by acquiring, effective this month, competitor DoublePoint Energy. The acquisition cost Pioneer the equivalent of $6.4 billion – divided up as 21.2 million shares of PXD common shares, $1 billion in cash, and the remainder, $900 million, in the assumption of debt and liabilities. Covering PXD for Raymond James, analyst John Freeman writes of the acquisition: “We anticipate meaningful efficiency improvements from longer laterals on the acquired acreage in addition to the typical G&A and interest synergies. The 97,000 net acre acquisition increases PXD's Permian leasehold to >1M net acres.” The analyst added, “With the acquisition of DoublePoint Energy, Pioneer further establishes itself as the leading Permian Basin pure-play E&P with top-tier acreage position and balance sheet. The company's ability to generate meaningful FCF should be more than sufficient to fulfill its intentions to return meaningful returns to shareholders…” In line with his comments, the analyst rates PXD a Strong Buy, with a target price of $245 to indicate a one-year upside of 67%. (To watch Freeman’s track record, click here) Overall, the word of the Street is an overwhelmingly bullish one for this oil stock, as TipRanks analytics exhibit PXD as a Strong Buy. Out of 24 analysts polled in the last 3 months, 19 are bullish, and 5 remain sidelined. With a return potential of ~29%, the stock’s consensus target price stands at $190.57. (See PXD stock analysis on TipRanks) NexImmune (NEXI) Shifting gears, we’ll move from the energy industry to the biotech field, where NexImmune is an early-stage biotechnology company in oncology, developing T-cell immunotherapies. In short, the company researches ways to stimulate the patient’s own immune system to fight cancer. The company has a development pipeline featuring two lead drug candidates, NEXI-001 and NEXI-002, which are in Phase 1/2 clinical trials as treatments for acute myeloid leukemia (AML), relapsed after allogeneic stem cell transplant or multiple myeloma refractory to >3 prior lines of therapy, respectively. The company has another four programs in various stages of early preclinical development. In the fourth quarter last year, NexImmune announced that the first patient has been dosed in the Phase 1/2 trial for NEXI-002. Also in 4Q20, initial results on the first 5 patients treated with NEXI-001 showed ‘early signs’ that the drug candidate is safe and prompts a robust immune response. NexImmune anticipates additional data on these trials in 2Q21, and a more complete set of results by the end of this year. In a move to raise capital, NexImmune in February of 2021 held an initial public offering (IPO) on the US stock exchange NASDAQ. The company put 7.441 million shares up, at a price of $17 per share. The sale, before expenses, grossed $126.5 million for the company. NexImmune’s move to the NASDAQ prompted Raymond James analyst Steven Seedhouse to initiate coverage on the stock. The analyst rates NEXI an Outperform (i.e. Buy) along with a $30 price target, which implies a 64% upside over the coming year. (To watch Seedhouse’s track record, click here) “Individually, we view NexImmune's programs as high risk/high reward (i.e. low PoS but high unadjusted revenue potential), plus in aggregate we view the platform as likely to yield a successful therapeutic with guidance by an experienced management team,” Seedhouse opined. The analyst added, "NexImmune's AIM ACT technology is related to a cell therapy called tumor infiltrating lymphocytes (TILs) and [rival] Iovance has shown promising data in Phase 2 study of TIL lifileucel in metastatic melanoma. Unlike the more targeted NEXI-001, lifileucel consists of a highly variable mix of T cell clonotypes. We think Iovance's market cap north of $4B is an aspirational target for NexImmune." This company has only had time to pick up three analyst reviews since it started trading on the US markets – but all three are to Buy, making the analyst consensus on the stock a Strong Buy. The shares are currently priced at $18.28 and have an average target of $33.33, which suggests an upside of ~82% this year. (See NEXI stock analysis on TipRanks) To find good ideas for stocks trading at attractive valuations, visit TipRanks’ Best Stocks to Buy, a newly launched tool that unites all of TipRanks’ equity insights. Disclaimer: The opinions expressed in this article are solely those of the featured analysts. The content is intended to be used for informational purposes only. It is very important to do your own analysis before making any investment.
- Motley Fool
My Top Oil Stock to Buy Right Now
The oil industry has an awful track record of creating shareholder value over the past decade. While oil-price volatility is one culprit, capital allocation has been another major factor contributing to the sector's poor performance. Oil companies have a history of chasing growth by investing in drilling as many wells as possible.
