Yahoo Finance Pioneer Natural Resources Company (NYSE:PXD) Analysts Are Way More Bearish Than They Used To Be
The latest analyst coverage could presage a bad day for Pioneer Natural Resources Company (NYSE:PXD), with the analysts making across-the-board cuts to their statutory estimates that might leave shareholders a little shell-shocked. Both revenue and earnings per share (EPS) estimates were cut sharply as analysts factored in the latest outlook for the business, concluding that they were too optimistic previously.
Following the latest downgrade, the 23 analysts covering Pioneer Natural Resources provided consensus estimates of US$7.8b revenue in 2020, which would reflect an uncomfortable 19% decline on its sales over the past 12 months. Statutory earnings per share are anticipated to nosedive 39% to US$2.76 in the same period. Before this latest update, the analysts had been forecasting revenues of US$8.9b and earnings per share (EPS) of US$4.95 in 2020. Indeed, we can see that the analysts are a lot more bearish about Pioneer Natural Resources' prospects, administering a substantial drop in revenue estimates and slashing their EPS estimates to boot.
View our latest analysis for Pioneer Natural Resources
The consensus price target fell 14% to US$117, with the weaker earnings outlook clearly leading analyst valuation estimates. Fixating on a single price target can be unwise though, since the consensus target is effectively the average of analyst price targets. As a result, some investors like to look at the range of estimates to see if there are any diverging opinions on the company's valuation. There are some variant perceptions on Pioneer Natural Resources, with the most bullish analyst valuing it at US$246 and the most bearish at US$63.00 per share. We would probably assign less value to the forecasts in this situation, because such a wide range of estimates could imply that the future of this business is difficult to value accurately. As a result it might not be possible to derive much meaning from the consensus price target, which is after all just an average of this wide range of estimates.
Another way we can view these estimates is in the context of the bigger picture, such as how the forecasts stack up against past performance, and whether forecasts are more or less bullish relative to other companies in the industry. We would highlight that sales are expected to reverse, with the forecast 19% revenue decline a notable change from historical growth of 26% over the last five years. Yet aggregate analyst estimates for other companies in the industry suggest that industry revenues are forecast to decline 0.3% next year. So it's pretty clear that Pioneer Natural Resources' revenues are expected to shrink faster than the wider industry.
The Bottom Line
The biggest issue in the new estimates is that analysts have reduced their earnings per share estimates, suggesting business headwinds lay ahead for Pioneer Natural Resources. Unfortunately they also downgraded their revenue estimates, and our aggregation of analyst estimates suggests that Pioneer Natural Resources revenue is expected to perform worse than the wider market. With a serious cut to this year's expectations and a falling price target, we wouldn't be surprised if investors were becoming wary of Pioneer Natural Resources.
With that said, the long-term trajectory of the company's earnings is a lot more important than next year. We have estimates - from multiple Pioneer Natural Resources analysts - going out to 2024, and you can see them free on our platform here.
Another way to search for interesting companies that could be reaching an inflection point is to track whether management are buying or selling, with our free list of growing companies that insiders are buying.
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