2023-04-27 15:38:07 ET
Pioneer Natural Resources ( NYSE: PXD ) -4.2% in Thursday's trading even after beating Q1 earnings expectations and announcing a new capital return framework; the company also announced the retirement of CEO Scott Sheffield .
Pioneer posted Q1 profits of $1.2B, down from $2B in the year-earlier quarter when oil prices were higher, on revenues of $4.5B, down from nearly $6.2B; operating cash flows fell 10% to $2.3B.
The stock could lag in the short term because "the optimism around a takeout may begin to fade with the Scott Sheffield's retirement announced," Siebert Williams analyst Gabriele Sorbara wrote, according to Bloomberg.
Sorbara, who rates Pioneer ( PXD ) as a Hold with a $260 price target, also noted the change in the company's shareholder return strategy, saying "the new capital returns framework is suggestive of a lower level of returns, which should not be a surprise given 95%-plus of quarterly FCF was not sustainable."
Pioneer's ( PXD ) new capital return program was praised by Citi's Scott Gruber, saying it will "provide flexibility to repurchase shares or payout a variable dividend applied to at least 75% of FCF less the base dividend."
Under the modified framework, Pioneer ( PXD ) said it expects to return at least 75% of quarterly free cash flow to shareholders via a combination of base-plus-variable dividends and opportunistic stock buybacks; capital returns after paying the base dividend from the 75% of quarterly free cash flow will be allocated to variable dividends and buybacks, while the remaining 25% of quarterly free cash flow will be directed to the balance sheet.
More on Pioneer Natural Resources:
- See financial and valuation comparisons to sector peers
- SA analysis: The Prize of the Permian
- Stock price return: 1% loss YTD, 2.5% gain in the past 12 months
For further details see:
Pioneer Natural plunges as CEO change dims optimism for potential takeout