Pioneer Natural Resources Added To Credit Suisse US Focus List

Credit Suisse added Pioneer Natural Resources PXD to its focus list, citing its importance in big cap E&P. The brokerage reiterated its Outperform rating and $212 price target on shares.

Analysts expect the company to enhance recoveries and returns, pointing out the increased completion intensity. The company also stands to gain from control over the operating expenses as it continued to push capital.

Credit Suisse said, "We note that PXD has de-rated relative to the peer group by 1.5x on 2018 strip estimates and trades at ~1.0x discount to large cap peers EOG and CXO. Given better leverage metrics and our forecast for superior debt-adjusted cash flow per share growth through 2018, we argue the discount is not warranted."

Until the 2018, the company would lead the oil charge and total growth in the brokerage's large cap universe. Therefore, the analysts estimate "a peer leading DACFPS CAGR of 38 Percent" between the years 2015 and 2018. This is sharply higher than the 15 percent "multiple compression of 3.6X 2017-2018 at the futures trip." The large cap peers enjoy a median of 1.4X.

Another key aspect pointed out by the analyst is that there is a material uplift potential from Version 3.0 providing the company to exceed its estimations though it incorporated Version 2.0 in its growth estimates.