Ahead of the fourth quarter results scheduled to be released on February 2, we have initiated coverage on Pioneer Natural Resources Company (PXD) with a Neutral recommendation and a $51 target price.
 
Irving, Texas-based Pioneer is an independent oil and gas exploration and production company. The Spraberry oil field in West Texas, the Hugoton gas field in Southwest Kansas and the West Panhandle gas field in Texas Panhandle anchor the company’s asset base.
 
Given its oil growth exposure, low-risk exploitation-driven growth and significant drilling potential at Eagle Ford, we favor the stock. The liquids content may be one of the keys to the competitiveness of the Eagle Ford play, compared to the other shale plays. Along with the continued success of the Spraberry oil field, this will definitely improve the company’s long-term earnings and cash flow visibility, in our view.
 
After having underperformed its peer group for the last few years, Pioneer is gaining investor attention with its attractive production growth and resource potential. The company is accelerating its drilling program around key areas with significant cost control initiatives. However, while we like Pioneer’s efforts of reducing debt level, there are other names in the group that have asset bases better positioned to deliver growth. Our Neutral recommendation reflects this view.
 
Shares of Pioneer were down 1.45% to $49.53 on Wednesday.
Read the full analyst report on “PXD”
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