More Room For Growth In Pioneer Energy Stock?

PXD: Pioneer Natural Resources logo
Pioneer Natural Resources

The shares of Pioneer Natural Resources (NYSE: PXD) are trading 20% above pre-Covid levels assisted by a series of acquisitions and rising benchmark prices. The company acquired Parsley Energy and Double Point Energy in all-stock deals valued at $7 billion and $6.2 billion, respectively. Interestingly, Pioneer Resources did not report any asset impairments last year largely due to a strong presence in the Permian Basin. With recent acquisitions, the company has further strengthened its Permian portfolio – indicating room for better operational efficiencies and higher investor returns. Thus, Trefis believes that the stock is a good energy sector pick to play oil demand recovery. Broadly, OPEC+ has acknowledged oil demand recovery as mass vaccination drives in major economies is pushing transportation and industrial demand. We highlight the historical trends in revenues, earnings, and stock prices of PXD in an interactive dashboard, Factors That Drove Pioneer Natural Resources (PXD) Stock Price Change Between 2018-End And Now.

Financial performance during the pandemic

Pioneer Natural Resources’ revenues declined by 29% from $9.4 billion in 2018 to $6.7 billion in 2020 as the pandemic drove down energy demand. While benchmark prices observed a 30% contraction last year, the company did not suspend operations as low production costs assisted positive operating cash. Moreover, the company retained dividend payouts by implementing a prudent capital investment plan and increasing its net debt by just $500 million. Notably, oil majors including Exxon Mobil, Chevron, BP, and Royal Dutch Shell registered  sizable impairment charges due to the pandemic. In 2020, Exxon Mobil and Chevron raised their long-term debt obligations by $20 billion to pay dividends and assist capital expenses.

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Industry Outlook

Brent and WTI benchmarks surpassed the $70/bbl mark in recent weeks as OPEC+ continued with previously announced production curtailments for July. Crude oil and petroleum product inventories have returned to historical levels in the U.S. and OECD countries. Given the supply restrictions by OPEC, benchmark prices are likely to remain high in the near-term as rising demand puts pressure on reserves. However, the EIA expects benchmark prices to decline by next year as OPEC+ increases production.

Is there a better opportunity over Pioneer Natural Resources? Pioneer Natural Resources Stock Comparison With Peers summarizes how PXD compares against peers on metrics that matter. You can find more such useful comparisons on Peer Comparisons.

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