Is Trending Stock Pioneer Natural Resources Company (PXD) a buy it now?
Pioneer of natural resources (PXD) has been one of the most searched stocks on Zacks.com lately. So, you might want to consider some of the facts that could shape the stock’s performance in the short term.
Over the past month, shares of this independent oil and gas company have returned -21.8%, compared to a -9.7% change in the Zacks S&P 500 composite. Gas – Exploration and Production – United States, which includes Pioneer Natural Resources, lost 19%. 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 $8.19 per share, indicating a +98.3% change from the prior year quarter. The Zacks consensus estimate has changed -3% in the last 30 days.
The current year earnings consensus estimate of $32.75 indicates a year-over-year change of +147%. This estimate has changed by -1.3% over the last 30 days.
For the next fiscal year, the consensus earnings estimate of $29.04 indicates a change of -11.3% from what Pioneer Natural Resources is expected to report a year ago. Over the past month, the estimate has changed by +1%.
With a strong externally audited track record, our proprietary stock rating tool, Zacks Rank, provides a more conclusive picture of a stock’s price direction in the short term, as it effectively harnesses the power of earnings estimate revisions. . Due to the magnitude of the recent consensus estimate change, along with three other factors related to earnings estimates, Pioneer Natural Resources is ranked Zacks Rank #3 (Hold).
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 $6.67 billion for the current quarter indicates a year-over-year change of +49.4%. Estimates of $26.45 billion and $25.18 billion for the current and next fiscal year indicate changes of +80.7% and -4.8%, 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.
Without considering the valuation of a stock, no investment decision can be effective. Crucial to predicting a stock’s future price performance is whether its current price accurately reflects the intrinsic value of the underlying business and the company’s growth prospects.
Compare the present value of a company’s valuation multiples, such as its price/earnings (P/E), price/sales (P/S), and price/cash flow (P/CF), to its own historical values help determine whether its stock is fairly priced, overvalued or undervalued, while comparing the company against its peers on these metrics gives a good idea of the reasonableness of its price.
The Zacks Value Style Score (part of the Zacks Style Scores system), which pays close attention to traditional and unconventional valuation metrics to rank stocks from A to F (an A is better than a B; a B is better than a C; and so on), is quite useful in determining whether a stock is overvalued, correctly priced, 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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