JPMorgan Upgrades Pioneer Natural Resources (PXD) to Overweight, 'can deliver nearly 5% oil growth at flat capex in 2024'

JPMorgan analyst Arun Jayaram upgraded Pioneer Natural Resources (NYSE: PXD) from Neutral to Overweight with a price target of $264.00 (from $251.00).

The analyst comments "We have been on the sidelines on the PXD story since the DoublePoint merger was announced in May 2021 (PXD has lagged XOP by ~30% since the DPE deal), but see a better risk-reward profile given the combination of strong and improving well productivity, the mix shift to longer laterals, and deflationary tailwinds. In addition, expectations appear relatively measured as the stock has lagged its quality Large Cap oil peers by ~4% on a YoY basis. As noted in Figure 8PXD North–Quaerly OiCumes, PXD’s YTD well productivity is trending ~8% above 2022 levels, which is driving improved capital efficiency. On the 2Q23 call, PXD raised its full-year oil guide by +1.2%, but lowered its full-year capex budget by -3%, or $125 MM, reflecting well productivity and efficiency gains (they reduced their full-year wells to sales guide by 10 wells to 505). We think the company can deliver nearly 5% oil growth at flat capex in 2024 with potential upside to our forecasts if the company can sustain productivity at 2023 levels. We upgrade to OW and raise our Dec-23 PT to $264 (from $251), which assumes the shares trade at parity with our NAV."

For an analyst ratings summary and ratings history on Pioneer Natural Resources click here. For more ratings news on Pioneer Natural Resources click here.

Shares of Pioneer Natural Resources closed at $233.72 yesterday.

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