UPDATE: Topeka Capital Downgrades Pioneer Natural Resources as Valuation Presents Limited Upside
In a report published Monday, Topeka Capital Markets analyst Gabriele Sorbara downgraded the rating on Pioneer Natural Resources (NYSE: PXD) from Buy to Hold, and lowered the price target from $200.00 to $195.00.
In the report, Topeka Capital Markets noted, “We are downgrading PXD to Hold from Buy, as shares present limited upside to our revised price target of $195 (from $200.00 previously). PXD shares have appreciated 46.6% since our March 27, 2013 initiation, above its peers which are up 22.5% on average. Following the recent outperformance, we believe PXD is sufficiently valued on 2014/2015 EBITDA generation and relative to RNAV. While we believe PXD stands alone as the premier player with more than 700,000 net acres prospective for the Wolfcamp shale in the Midland Basin, the current valuation awards a paramount premium to the group. Further, the numerous catalyst wells with 3Q13 results add no incremental value to our RNAV and growth upside, given our production and RNAV valuation model factor in a ramp to 50 horizontal rigs in the Midland Basin by 2018 – also presenting execution risk, in our view.”
Pioneer Natural Resources closed on Friday at $184.83.
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