Pioneer Natural Resources (PXD) is a Top Stock Pick for when Oil Rebounds - Imperial Capital

Analyst Bob Christensen of Imperial Capital is maintaining Outperform on Pioneer Natural Resources Co. (NYSE: PXD) shares, but dropping the price target to $214 from $247. The current price is sitting at 156.65. "We see PXD as one of the best positioned companies for creating stock price momentum when oil prices rebound. Additionally, we believe the firm’s recent decision to convert 85% of its three-way collar hedges to fixed-price swaps ensures greater protection of its 2015 cash flow." PXD is expected to pronounce a capital budget reduction to retain its strong balance sheet while still respectfully growing in 2015. PXD is looking well hedged and is in line to have strong financials the next couple years.

"We see the company remaining a high-quality, low-cost, high-growth oil producer even if a two year period of low oil prices transpires," he added.

PXD is the largest and lowest cost operator in the prolific Midland Basin of Texas. Based on our price target of $214, they estimate that PXD would trade at 18.0x 2015 EV/EBITDAX compared to its current 13.5x level. PXD currently trades at a premium to its peer average of 8.0x.

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