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Pioneer Natural (PXD) Up 22.9% in 3 Months: More Growth Ahead?

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Pioneer Natural Resources Company’s shares have jumped 22.9% in the past three months. Its huge inventory of future drilling sites in the Permian Basin is expected to help it drive production and thereby return more to shareholders. Headquartered in Irving, TX, Pioneer Natural is one of the largest explorers and producers in the domestic market, with a market cap of $47.1 billion.

The WTI crude price index is currently hovering around the $80 per barrel range, marking a massive improvement from last year’s historic lows. Rising demand, thanks to multiple vaccine rollouts around the world, is supporting the price. Natural gas prices are currently trading at a multi-year high, well beyond the $5 threshold. Rising consumption in Asia and Europe, and low supply of the commodity are keeping the price high. Pioneer Natural is enjoying the benefits of such high commodity prices.

Can It Retain Momentum?

The answer is yes and here’s why we think so:

Pioneer Natural projects total production for this year in the range of 605-631 thousand barrels of oil equivalent per day (MBoe/d), indicating an improvement from 367.3 MBoe/d in 2020. The increased output coupled with rising commodity prices will boost the company’s bottom line.

It is to be noted that Pioneer Natural provided the production outlook based on its 2021 capital budget of $3.1-$3.4 billion. The company believes that this capital spending will be fully funded by $6.5 billion of projected cash flow.

Estimates

The Zacks Consensus Estimate for Pioneer Natural’s 2021 bottom line is pegged at $12.76 per share, signaling a massive increase from the year-ago figure of $1.64. Also, the consensus estimate for 2021 revenues stands at $15.4 billion, indicating a rise of 127.4% year over year. It beat earnings estimates twice in the last four quarters and missed on the other two occasions, with an average surprise of 18%.

Zacks Rank & Stocks to Consider

The company currently has a Zacks Rank #3 (Hold). Some better-ranked players in the energy space include Ovintiv Inc. (OVV - Free Report) , Cheniere Energy, Inc. (LNG - Free Report) and Schlumberger Limited (SLB - Free Report) , each holding a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

The Zacks Consensus Estimate for Ovintiv’s bottom line for 2021 is pegged at $6.10 per share, indicating a massive increase from last year’s figure of 35 cents.

Cheniere Energy’s bottom line for third-quarter 2021 is expected to surge 239.1% year over year.

Schlumberger’s bottom line for 2021 is expected to rise 85.3% year over year.


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