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Stifel: Pioneer Natural Resources 'Ramp Coming Into Focus'

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In a report published Tuesday, Stifel analyst Daniel D. Guffey maintained a Buy rating on Pioneer Natural Resources (NYSE: PXD) and a price target of $190.

Pioneer announced the sale of its Eagle Ford Shale Midstream assets toEnterprise Product Partners, LP (NYSE: EPD) for $2.15 billion. As per the terms of the deal, EPD will pay $1.15B at closing, which is expected in early 3Q15, and $1B twelve months post close.

"After retiring $150 million of EFS midstream debt, PXD is expected to receive after tax proceeds of approximately $900 million, in line with our previous estimate," analyst Daniel D. Guffey mentioned.

Pioneer is planning to increase its production to the pre-oil price collapse activity levels and thus intends to add six Midland Basin and two Eagle Ford rigs in 1Q16. The management expects to generate 15 percent + annual production growth in 2016-2018.

"Should PXD fully follow through on its expected rig adds, we project the company could achieve 20% annual production growth in 2017," Guffey added.

In the report Stifel noted, "The company's YE15E and YE16E debt/TTM EBITDA of 1.2x and 1.5x is meaningfully lower than its projected large cap peer group averages of 2.2x and 2.1x."

"Pro forma the EFS sale, we project the company will be able to fund its accelerated capital program via cash flow and from cash on hand through 3Q16," Guffey stated.

Latest Ratings for PXD

Feb 2017Mitsubishi UFJUpgradesNeutralOverweight
Feb 2017Societe GeneraleUpgradesHoldBuy
Jan 2017Societe GeneraleUpgradesSellHold

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Posted-In: StifelAnalyst Color Reiteration Analyst Ratings


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