Pioneer Natural Resources Company (NYSE:PXD) shareholders will have a reason to smile today, with the analysts making substantial upgrades to this year's forecasts. Consensus estimates suggest investors could expect greatly increased statutory revenues and earnings per share, with the analysts modelling a real improvement in business performance.
Following the upgrade, the most recent consensus for Pioneer Natural Resources from its 13 analysts is for revenues of US$14b in 2021 which, if met, would be a major 92% increase on its sales over the past 12 months. Losses are expected to turn into profits real soon, with the analysts forecasting US$9.52 in per-share earnings. Previously, the analysts had been modelling revenues of US$11b and earnings per share (EPS) of US$8.27 in 2021. So we can see there's been a pretty clear increase in analyst sentiment in recent times, with both revenues and earnings per share receiving a decent lift in the latest estimates.
Despite these upgrades, the analysts have not made any major changes to their price target of US$192, suggesting that the higher estimates are not likely to have a long term impact on what the stock is worth. That's not the only conclusion we can draw from this data however, as some investors also like to consider the spread in estimates when evaluating analyst price targets. Currently, the most bullish analyst values Pioneer Natural Resources at US$245 per share, while the most bearish prices it at US$143. These price targets show that analysts do have some differing views on the business, but the estimates do not vary enough to suggest to us that some are betting on wild success or utter failure.
Looking at the bigger picture now, one of the ways we can make sense of these forecasts is to see how they measure up against both past performance and industry growth estimates. The analysts are definitely expecting Pioneer Natural Resources' growth to accelerate, with the forecast 92% annualised growth to the end of 2021 ranking favourably alongside historical growth of 22% per annum over the past five years. By contrast, our data suggests that other companies (with analyst coverage) in a similar industry are forecast to grow their revenue at 8.9% per year. Factoring in the forecast acceleration in revenue, it's pretty clear that Pioneer Natural Resources is expected to grow much faster than its industry.
The Bottom Line
The biggest takeaway for us from these new estimates is that analysts upgraded their earnings per share estimates, with improved earnings power expected for this year. They also upgraded their revenue estimates for this year, and sales are expected to grow faster than the wider market. The lack of change in the price target is puzzling, but with a serious upgrade to this year's earnings expectations, it might be time to take another look at Pioneer Natural Resources.
With that said, the long-term trajectory of the company's earnings is a lot more important than next year. We have estimates - from multiple Pioneer Natural Resources analysts - going out to 2025, and you can see them free on our platform here.
Of course, seeing company management invest large sums of money in a stock can be just as useful as knowing whether analysts are upgrading their estimates. So you may also wish to search this free list of stocks that insiders are buying.
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