Pioneer of natural resources (PXD) is one of the most viewed stocks by Zacks.com visitors lately. So it might be worth looking at some of the factors that could affect the stock’s short-term performance.
Over the past month, shares of this independent oil and gas company have returned +5.6%, compared to the -8% change in the Zacks S&P 500 composite. Gas – Exploration and Production – United States, which includes Pioneer Natural Resources, gained 5.2%. The key question now is: what could be the future direction of the title?
While press releases or rumors about a substantial change in a company’s trading outlook usually “trend” its stock and cause an immediate price change, there are always fundamental facts that ultimately dominate the take. purchase and retention decision.
Revisions to earnings estimates
Rather than focusing on anything else, at Zacks we prioritize assessing change in a company’s earnings projection. Indeed, we believe that the fair value of its shares is determined by the present value of its future earnings streams.
Our analysis is primarily based on how sell-side analysts covering the stock revise their earnings estimates to reflect the latest trading trends. When a company’s earnings estimates increase, the fair value of its stock also increases. And when the fair value of a stock is higher than its current market price, investors tend to buy the stock, causing its price to rise. For this reason, empirical studies indicate a strong correlation between trends in earnings estimate revisions and short-term movements in stock prices.
For the current quarter, Pioneer Natural Resources is expected to post earnings of $8.51 per share, indicating a +106.1% change from the prior year quarter. The Zacks consensus estimate has changed by +0.4% over the past 30 days.
For the current fiscal year, the consensus earnings estimate of $33.49 indicates a change of +152.6% from the prior year. Over the last 30 days, this estimate has changed by -1.1%.
For the next fiscal year, the consensus earnings estimate of $29.59 indicates a change of -11.7% from what Pioneer Natural Resources is expected to report a year ago. Over the past month, the estimate has changed by +1.2%.
With an impressive externally audited track record, our proprietary stock rating tool – the Zacks Ranking – is a more conclusive indicator of a stock’s short-term price performance, as it effectively harnesses the power of earnings estimate revisions. . The magnitude of the recent consensus estimate change, along with three other factors related to earnings estimates, resulted in a Zacks No. 3 (hold) ranking for Pioneer Natural Resources.
The chart below shows the evolution of the company’s consensus 12-month EPS estimate:
12 month EPS
Revenue Growth Forecasts
Although earnings growth is arguably the most superior indicator of a company’s financial health, nothing as such happens if a company is unable to increase its revenue. After all, it is almost impossible for a company to increase its profits for an extended period of time without increasing its revenue. It is therefore important to know the potential revenue growth of a company.
In the case of Pioneer Natural Resources, the consensus sales estimate of $6.95 billion for the current quarter indicates a year-over-year change of +55.8%. Estimates of $26.8 billion and $25.47 billion for the current and next fiscal year indicate changes of +83% and -5%, respectively.
Latest reported results and history of surprises
Pioneer Natural Resources reported revenue of $6.92 billion in the last reported quarter, representing a year-over-year change of +102.4%. EPS of $9.36 for the same period versus $2.55 a year ago.
Compared to the Zacks consensus estimate of $6.93 billion, reported revenue is a surprise -0.07%. Surprise EPS was +6.24%.
The company has exceeded consensus EPS estimates in each of the past four quarters. The company exceeded consensus revenue estimates only once during this period.
No investment decision can be effective without considering the valuation of a stock. Whether a stock’s current price accurately reflects the intrinsic value of the underlying business and the company’s growth prospects is a key determinant of its future price performance.
While comparing the current values of a company’s valuation multiples, such as the price-to-earnings (P/E) ratio, the price-to-sales (P/S) ratio, and the price-to-cash flow (P/CF) ratio , with its own historical values help determine whether its stock is fairly valued, overvalued or undervalued, comparing the company against its peers on these metrics gives a good idea of the reasonableness of the stock price .
As part of the Zacks Style Scores system, the Zacks Value Style Score (which assesses both traditional and unconventional valuation metrics) organizes stocks into five groups ranging from A to F (A is better than B; B is better than C; and so on.), which helps determine whether a stock is overvalued, correctly valued, or temporarily undervalued.
Pioneer Natural Resources is rated B on this front, indicating that it is trading at a discount to its peers. Click here to see values for some of the rating metrics that led to this rating.
The facts discussed here and much more information on Zacks.com might help determine whether it’s worth paying attention to the market buzz about Pioneer Natural Resources. However, its No. 3 Zacks ranking suggests it could perform in line with the broader market in the near term.
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Pioneer Natural Resources Company (PXD): Free Stock Analysis Report
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