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Pioneer Natural Resources Company’s shares have gained 40.4% year to date compared with 39.8% growth of the composite stocks belonging to the industry.
The Zacks Rank #3 (Hold) stock, with a market cap of almost $62 billion, witnessed a rise in the Zacks Consensus Estimate for 2022 earnings per share in the past 60 days. Also, the upstream energy firm is likely to see earnings growth of 77.5% this year.
Image Source: Zacks Investment Research
Let’s delve into the factors behind the stock’s price appreciation.
What’s Favoring the Stock?
The West Texas Intermediate crude price is currently trading at around $110 per barrel, a substantial improvement from a slump into the negative territory in April 2020. The ongoing recovery in demand, owing to the easing of the coronavirus-led restrictions, will continue to support the strong momentum in oil prices.
Overall, improving oil prices are boons for Pioneer Natural’s upstream operations since the company is the largest producer in Permian — the most prolific basin in the United States. While operating in the basin, the company enjoys economies of scale benefits. At 2021-end, Pioneer Natural’s proved reserves were 2,222,000 MBoe, up from the year-ago period’s 1,271,321 MBoe.
For 2022, Pioneer Natural projects total production at 623-648 MBoe/d, marking an improvement from 617.3 MBoe/d reported in 2021. Oil production will likely be 350-365 thousand barrels per day. The company is well-positioned to capitalize on the crude price rally.
Pioneer Natural enjoys ample liquidity and a low leverage level. As of Dec 31, 2021, the company’s cash and cash equivalents were $3,847 million, with long-term debt of $6,688 million. The upstream energy player’s debt to capitalization of 23.3% has been persistently lower than the industry over the past few years, reflecting considerably lower debt exposure.
Factors Deterring the Stock
Rising costs and expenses associated with oil and gas production have been hurting Pioneer Natural’s bottom line. In 2021, the company’s expenses for oil and gas production were $1,267 million, indicating a sharp rise from $682 million reported in 2020.
The uncertainty in the energy business, owing to the coronavirus pandemic, has been affecting the company’s upstream operations. While the industry’s recovery has been stronger than expected, rapidly spreading new variants of the virus is making the near-term outlook for upstream business extremely gloomy.
Devon Energy Corporation (DVN - Free Report) is an independent energy company that primarily engages in the exploration, development and production of oil and natural gas. At 2021-end, Devon had proved developed and undeveloped reserves of nearly 1,625 million barrels of oil equivalent (MMBOE), up from the 2020-end level of 752 MMBOE.
Devon’s earnings for 2022 are expected to surge 84.7% year over year. The company’s board approved an increase in the dividend rate to $1, payable to shareholders on Mar 31, 2022. Management approved variable and fixed dividends for shareholders to further enhance the shareholder value.
PDC Energy, Inc. is an independent upstream operator that engages in the exploration, development and production of natural gas, crude oil and natural gas liquids. On Dec 31, 2021, PDC Energy's total estimated proved reserves were 213,845 thousand barrels (MBbls) of oil, 240,389 MBbls of natural gas liquids and 2,159,725 million cubic feet of natural gas.
PDC Energy’s earnings for 2022 are expected to grow 67.8% year over year. As of Dec 31, PDC Energy had $33.8 million in cash and cash equivalents, and $942.1 million in long-term debt, representing a debt-to-capitalization of 24.5%.
Petrobras (PBR - Free Report) is one of the largest publicly traded Latin America oil companies dominating Brazil’s oil and gas sector. At the end of 2021, Petrobras had cash and cash equivalents of $10,480 million. Free cash flow for 2021 was up 36.7% year over year to $31,466 million.
Petrobras’ earnings for 2022 are expected to grow 55.5% year over year. Petrobras, with a huge debt burden, laid strong emphasis on its debt reduction in its recent five-year business management plan (2022-2026) to strengthen its credit rating.
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Pioneer Natural (PXD) Stock Rises 40.4% YTD: What's Aiding It?
Pioneer Natural Resources Company’s shares have gained 40.4% year to date compared with 39.8% growth of the composite stocks belonging to the industry.
The Zacks Rank #3 (Hold) stock, with a market cap of almost $62 billion, witnessed a rise in the Zacks Consensus Estimate for 2022 earnings per share in the past 60 days. Also, the upstream energy firm is likely to see earnings growth of 77.5% this year.
Image Source: Zacks Investment Research
Let’s delve into the factors behind the stock’s price appreciation.
What’s Favoring the Stock?
The West Texas Intermediate crude price is currently trading at around $110 per barrel, a substantial improvement from a slump into the negative territory in April 2020. The ongoing recovery in demand, owing to the easing of the coronavirus-led restrictions, will continue to support the strong momentum in oil prices.
Overall, improving oil prices are boons for Pioneer Natural’s upstream operations since the company is the largest producer in Permian — the most prolific basin in the United States. While operating in the basin, the company enjoys economies of scale benefits. At 2021-end, Pioneer Natural’s proved reserves were 2,222,000 MBoe, up from the year-ago period’s 1,271,321 MBoe.
For 2022, Pioneer Natural projects total production at 623-648 MBoe/d, marking an improvement from 617.3 MBoe/d reported in 2021. Oil production will likely be 350-365 thousand barrels per day. The company is well-positioned to capitalize on the crude price rally.
Pioneer Natural enjoys ample liquidity and a low leverage level. As of Dec 31, 2021, the company’s cash and cash equivalents were $3,847 million, with long-term debt of $6,688 million. The upstream energy player’s debt to capitalization of 23.3% has been persistently lower than the industry over the past few years, reflecting considerably lower debt exposure.
Factors Deterring the Stock
Rising costs and expenses associated with oil and gas production have been hurting Pioneer Natural’s bottom line. In 2021, the company’s expenses for oil and gas production were $1,267 million, indicating a sharp rise from $682 million reported in 2020.
The uncertainty in the energy business, owing to the coronavirus pandemic, has been affecting the company’s upstream operations. While the industry’s recovery has been stronger than expected, rapidly spreading new variants of the virus is making the near-term outlook for upstream business extremely gloomy.
Stocks to Consider
Investors interested in the energy sector might look at the following companies that presently sport a Zacks Rank #1 (Strong Buy). You can see the complete list of today's Zacks #1 Rank stocks here.
Devon Energy Corporation (DVN - Free Report) is an independent energy company that primarily engages in the exploration, development and production of oil and natural gas. At 2021-end, Devon had proved developed and undeveloped reserves of nearly 1,625 million barrels of oil equivalent (MMBOE), up from the 2020-end level of 752 MMBOE.
Devon’s earnings for 2022 are expected to surge 84.7% year over year. The company’s board approved an increase in the dividend rate to $1, payable to shareholders on Mar 31, 2022. Management approved variable and fixed dividends for shareholders to further enhance the shareholder value.
PDC Energy, Inc. is an independent upstream operator that engages in the exploration, development and production of natural gas, crude oil and natural gas liquids. On Dec 31, 2021, PDC Energy's total estimated proved reserves were 213,845 thousand barrels (MBbls) of oil, 240,389 MBbls of natural gas liquids and 2,159,725 million cubic feet of natural gas.
PDC Energy’s earnings for 2022 are expected to grow 67.8% year over year. As of Dec 31, PDC Energy had $33.8 million in cash and cash equivalents, and $942.1 million in long-term debt, representing a debt-to-capitalization of 24.5%.
Petrobras (PBR - Free Report) is one of the largest publicly traded Latin America oil companies dominating Brazil’s oil and gas sector. At the end of 2021, Petrobras had cash and cash equivalents of $10,480 million. Free cash flow for 2021 was up 36.7% year over year to $31,466 million.
Petrobras’ earnings for 2022 are expected to grow 55.5% year over year. Petrobras, with a huge debt burden, laid strong emphasis on its debt reduction in its recent five-year business management plan (2022-2026) to strengthen its credit rating.