Pioneer Natural Resource (PXD) Update - Aug 13

[dan_s]

I am reviewing the updated profile for PXD which was prepared by one of our "Super Star MBAs" and something jumped out at me that I want to share today. We will publish the updated profile on Tuesday or Wednesday.

In the last three months, 20 respected analysts have submitted detailed forecast/valuation models for PXD to Reuters / First Call. PXD is a big, well-known company with a lot of Wall Street coverage. What jumps out at me is that the valuations for this stock range from $210 to $325 per share. The stock is trading at $183/share as I write this post. So... my point is this:
> Not a single Wall Street firm thinks this stock is over-valued, despite all of the concern over Permian Basin takeaway capacity issues, weakening demand for oil, some firms still using very low commodity price decks, etc.
> The lowest valuation ($210) is 14.7% below where it trades today. How do you rate a stock a HOLD if you think it has 15% upside???

I actually saw a very highly respected firm, I think it was Credit Suisse, say that PXD's Net Asset Value / break-up value was over $400/share. I guarantee you that if Exxon, Shell, etc. got into a bidding war for PXD (which has a clear path to over 1,000,000 Boepd of production), $400/share is what about where it would go for.

I got a detailed report on PXD from Raymond James in Mid-July and their valuation was $340/share.

My valuation for PXD today is $247, but there is clear upside from there. PXD, CXO, CLR and EOG hold some of the most valuable real estate on this planet yet they are trading today at "K-Mart prices".