Why Pioneer Natural Resources (PXD) Might be Well Poised for a Surge

Investors might want to bet on Pioneer Natural Resources (PXD), as earnings estimates for this company have been showing solid improvement lately. The stock has already gained solid short-term price momentum, and this trend might continue with its still improving earnings outlook.

The upward trend in estimate revisions for this independent oil and gas company reflects growing optimism of analysts on its earnings prospects, which should get reflected in its stock price. After all, empirical research shows a strong correlation between trends in earnings estimate revisions and near-term stock price movements. This insight is at the core of our stock rating tool -- the Zacks Rank.

The five-grade Zacks Rank system, which ranges from a Zacks Rank #1 (Strong Buy) to a Zacks Rank #5 (Strong Sell), has an impressive externally-audited track record of outperformance, with Zacks #1 Ranked stocks generating an average annual return of +25% since 2008.

For Pioneer Natural Resources, there has been strong agreement among the covering analysts in raising earnings estimates, which has helped push consensus estimates considerably higher for the next quarter and full year.

The chart below shows the evolution of forward 12-month Zacks Consensus EPS estimate:

12 Month EPS

Current-Quarter Estimate Revisions

The earnings estimate of $8.45 per share for the current quarter represents a change of +231.37% from the number reported a year ago.

Over the last 30 days, the Zacks Consensus Estimate for Pioneer Natural Resources has increased 13.7% because five estimates have moved higher while four have gone lower.

Current-Year Estimate Revisions

For the full year, the earnings estimate of $32.46 per share represents a change of +144.8% from the year-ago number.

There has been an encouraging trend in estimate revisions for the current year as well. Over the past month, five estimates have moved up for Pioneer Natural Resources versus four negative revisions. This has pushed the consensus estimate 13.99% higher.

Favorable Zacks Rank

Thanks to promising estimate revisions, Pioneer Natural Resources currently carries a Zacks Rank #2 (Buy). The Zacks Rank is a tried-and-tested rating tool that helps investors effectively harness the power of earnings estimate revisions and make the right investment decision. You can see the complete list of today's Zacks #1 Rank (Strong Buy) stocks here.

Our research shows that stocks with Zacks Rank #1 (Strong Buy) and 2 (Buy) significantly outperform the S&P 500.

Bottom Line

Pioneer Natural Resources shares have added 10.3% over the past four weeks, suggesting that investors are betting on its impressive estimate revisions. So, you may consider adding it to your portfolio right away to benefit from its earnings growth prospects.

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