Pioneer Natural Resources Company

Pioneer Natural Resources’ stock has been climbing as its results are approaching. It is important to highlight that the company had a mixed performance in the last quarter and had failed to meet the analyst consensus in terms of revenues but managed an earnings beat. In the last quarter, the company increased its base dividend by over 40%, which is supported by a strong balance sheet, good margins, deep inventory, and high-quality assets. Maintaining a growing and strong dividend is the foundation of the company’s capital return strategy. Pioneer, along with ConocoPhillips and Devon, join OGMP2.0 with a commitment to increased transparency and leading Methane Performance in Emissions Reporting. Pioneer remains consistent in its core investment thesis which is underpinned by a low reinvestment rate and low leverage robust corporate returns. The capital return framework of the company is solid. The implementation of simul frac resulted in great success in both reducing cycle cost and time. Continued operational improvements have also benefitted the completions efficiency of the company. Strong marketing arrangements, high oil percent realizations, and best-in-class cash margins of Pioneer drive top-tier price realizations. Overall, we provide the stock of Pioneer Natural Resources with an ‘Underperform’ rating and a revision in the target price.