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Insiders Active in Leading E&P Focused on Asset Sales, Balance Sheet Strength

by | Nov 14, 2021

Pioneer Natural (PXD) with a sizable open market buy on 11/8 from Director Maria Dreyfus of 10,632 shares at $188, near $2M. This is the first insider buy in the name since March 2020 and largest in over four years. PXD shares rallied strong in September and early October and now back at the 23.6% Fibonacci of the run at $181.75. Shares put in a nice red-to-green reversal on Friday and above $185 has room to run back to $195 and out of this range. The long-term range breakout has a measured move to $210. The $44.83B company has one of the best balance sheets of the E&P group with shares trading 8.85X earnings, 3.13X sales, and 38.5X FCF with a 1.75% yield. PXD recently announced a deal with Continental to sell their Delaware Basin assets for $3.25B, the second large asset sale of the year for the firm which is accelerating debt reduction. PXD is also now a pure play on the higher-margin, higher-return Midland Basin. Analysts have an average target for shares of $220 with a Street High $284. Citi starting coverage at Buy on 11/8 with a $216 PT. Mizuho positive on 10/26 citing increasing confidence in a second half of 2022 call on U.S. unconventional oil growth and their overall feeling energy is poised to outperform and exploration and production is positioned to lead. Piper positive on 10/21 noting that 2021 was largely anticipated to be a balance sheet repair year for the company but stronger than expected commodity prices have pulled forward shareholder return plans. Hedge fund ownership rose 10.5%. Short interest is 2.88%. PXD has seen bullish options flow out to May recently including buyers in the $140 and $165 calls in size. The May $160/$200 call spread also in open interest 4500X from a buyer on 8/16.

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