Why Pioneer Natural Resources Is 'Making All The Right Moves'

BMO Capital Markets upgraded Pioneer Natural Resources PXD to Outperform from Market Perform and maintained its $155 target price. The firm issued its research report on Tuesday, noting that "Pioneer has made all the right moves over the past 1-2 years in terms of positioning the company to succeed at a low oil price."

The firm commented that Pioneer has "built a war chest" through its asset sales, joint ventures, hedging and equity.

"Pioneer has built a war chest ("Last Man Standing") that provides visibility around the best multi-year outlook among the E&P sector ("Winning the Market Share Game"), BMO noted.

"While growing oil volumes 20 percent with a low three handle on oil prices could be viewed as growth for growth's sake, on a relative basis Pioneer's wellhead returns are top-tier (with well productivity improving) and overall capital efficiency continues to get better evidenced by a$2.4-2.6Bn preliminary 2016 capital program that targets 10-15 percent total production(+20 percent oil) growth," the firm commented.

BMO Capital Markets sees Pioneer as having the best three-year outlook in E&P.

Shares fell about 3 percent on Tuesday to $110.