Stifel's take on PXD - May 7

[dan_s]

By Derrick Whitfield at Stifel: Pioneer Natural Resources Company (PXD, $156.29, Buy; Target $320.00)

Pioneer completes transition to a Permian pure-play with a capital efficient production beat - We view the release as slightly positive. The positives include i) a total and oil production beat (2.8% and 1.4% above consensus, respectively) on lower than expected capex (5.1% below consensus), ii) a strong operations update with further outperformance in the WC-D (+50% above Stifel's type
curve) and a third successful Stackberry test, iii) increasing the dividend to a ~1% yield, and iv) completing the transition to a Permian pure-play.
The negatives include i) lower than expected Q219 oil production guidance (1.3% below consensus, adjusting for divestitures) and ii) only $25mm of Eagle Ford proceeds will be paid before 2023
with future amounts contingent on commodity prices. Net-net, the company's capital efficient production beat and planned dividend increase should outweigh the lower than expected Q219 oil production guidance.