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Here's Why You Should Retain Pioneer Natural (PXD) Stock Now

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Pioneer Natural Resources Company (PXD - Free Report) has seen upward estimate revisions for 2021 and 2022 earnings in the past 30 days. Also, the independent oil and gas exploration and production company is likely to see earnings growth of 579% and 36%, respectively, for this year and next.

What’s Favoring the Stock?

The price of West Texas Intermediate crude, trading at more than $65 per barrel mark, has improved drastically from the pandemic-hit April last year, when oil was in the negative territory. With coronavirus vaccines being rolled out at a massive scale, leading to gradual reopening of the economy, the demand for fuel will possibly improve further.

Overall, improving oil prices are definitely a boon for Pioneer Natural’s upstream operations since the company is the largest producer in Permian – the most prolific basin in the United States. While operating in the basin, the company enjoys economies of scale benefits.

The company, with its accretive combinations, has enhanced its position further to become a low-cost operator in the Permian. With the closure of the acquisition of DoublePoint Energy early this month, the company, carrying a Zacks Rank #3 (Hold), added undeveloped premium Midland Basin net acres, spanning across 97,000 highly contiguous net acres.

Factors Deterring the Stock

Rising costs and expenses associated with oil and gas production have been hurting the company’s bottom line. Notably, for the June quarter, the company projects production costs at a band of $6.75 per BOE to $8.25 per BOE. This suggests an improvement over $5.90 per BOE in the prior quarter.

Moreover, oil price volatility owing to coronavirus woes and inflation fears has been disrupting the upstream operations of the leading upstream company.

Stocks to Consider

Some better-ranked players in the energy space are Whiting Petroleum Corporation (WLL - Free Report) , Continental Resources, Inc. (CLR - Free Report) and Matador Resources Company (MTDR - Free Report) . All the stocks sport a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

Whiting Petroleum has witnessed upward earnings estimate revisions for 2021 in the past 30 days.

Continental is expected to witness earnings growth of 256% in 2021.

Matador is likely to see earnings growth of 300% in 2021.

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