Updated from 9:27 a.m. EDT with recent share prices and comments from analyst reports.
NEW YORK (TheStreet) -- Energy stocks of the S&P 500 were bouncing back Wednesday after leading the selloff Tuesday. Shares of energy stocks in the index were collectively up more than 1% in the first hour of trading after falling 2.14% on Tuesday.
Pioneer Natural Resources (PXD) led those decliners Tuesday, falling 5.6% to $209.98. At 10:30 a.m. EDT on Wednesday, shares of Pioneer were up 1.75% to $213.65. Pioneer announced quarterly results Monday after the close, missing analysts' estimates for revenue even as it beat on earnings.
Shares of Exxon Mobil (XOM) also fell nearly 2% in active trading Tuesday but were up almost 1% early Wednesday. Shares of Chevron (CVX) dropped 2.5% to close Tuesday at $124.96, but were likewise bouncing back, up 1.06% on Wednesday.
Although we think PXD should be trading at a valuation premium to its peers because of its strong oil production growth outlook, we believe the surge in the stock price in the last five years made the stock too expensive, and even after the recent correction, the stock is still trading at a significant premium to its peers.KeyBanc - Buy, 12-month price target of $240
Long-term positive for shareholders. . . . Operationally, PXD keeps producing on its quality acreage by drilling both in the Eagle Ford and Permian and we are encouraged to see additional steps to remove capital from vertical drilling and allocated toward higher return horizontal drilling. With improved operational designs improving IRR's and a back-end weighted capex profile, we see 2015 estimates as having potential room to the upside.Stern Agee - Neutral
On an EV/EBITDA basis, PXD trades at 12.5x 2014E EBITDA of $2.63 billion, versus the group average of 7.7x, and at 11.6x 2015E EBITDA of $2.93 billion, versus the group average of 6.1x. On an EV/CF basis, shares trade at 13.4x 2014E Cash Flow of $2.43 billion, versus the group average of 8.8x, and at 12.4x 2015E Cash Flow of $2.75 billion, versus the group average of 6.7x.Read More: Australia's Carbon Tax Experiment Goes Up in Smoke -- Written by Carlton Wilkinson in New York Follow @CarltonTSC Read More: Australia's Carbon Tax Experiment Goes Up in Smoke
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