Pioneer Natural Resources Has Underperformed the Industry



Pioneer Natural Resources’ stock performance

Year-to-date, Pioneer Natural Resources (PXD) stock price fell from $180.03 to $131.13—a decline of ~27%. To learn the medium term trend for a stock price, we can look at the weekly chart. PXD’s stock price is in a steep downtrend, showing a pattern of lower highs and lower lows since the start of 2017. PXD stock is trading below its 50-week and 200-week moving averages. On September 5, PXD’s stock price closed at $131.13, whereas its 50-week and 200-week moving averages stood at $172.41 and $165.93, respectively. PXD’s 50-week moving average is trending down, and it might fall below the 200-week moving average—a particularly bearish technical indicator. Currently, PXD’s stock price is ~24% below its 50-week moving average.

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PXD lagging behind crude oil and natural gas prices

Pioneer Natural Resources’ production mix contains ~77% liquids and ~23% natural gas. So PXD’s stock price should be more sensitive to the changes in crude oil (USO) than natural gas (UNG) prices. Since the start of 2017, crude oil (USO) prices fell from $53.72 per barrel to $48.66 per barrel—a decrease of almost 9%.

Even natural gas prices are down ~20% in 2017. Natural gas prices fell from $3.73 per MMBtu (million British thermal units) to $2.97 per MMBtu. So PXD’s stock is underperforming both natural gas and crude oil prices in fiscal 2017.

Pioneer Natural Resources’ peers

Pioneer Natural Resources mainly operates in the Permian Basin. PXD’s peers Diamondback Energy (FANG), RSP Permian (RSPP), and ConocoPhillips (COP) also operate in the Permian Basin, and they’re down ~9%, ~31%, and ~10%, respectively, in 2017.

In general, year-to-date, the SPDR S&P Oil and Gas Exploration & Production ETF (XOP)—which represents an index of stocks across the energy industry—has underperformed the SPDR S&P500 ETF (SPY) by a wide margin. XOP is down ~26%, whereas SPY is up ~11% in fiscal 2017. However, PXD has underperformed even this broad energy sector index (XOP)—though by a smaller margin.

Series overview

Having analyzed PXD’s year-to-date price performance, we’ll move on to look at PXD’s key financial metrics in the next parts of this series. Specifically, we’ll study PXD’s earnings per share, revenues, and cash flows. We’ll also take a look at the short interest in the stock, its implied volatility, and Wall Street’s ratings on the stock.

Let’s start with PXD’s most recent earnings.


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