Benzinga - by Lekha Gupta, Benzinga Editor.
BMO Capital Markets analyst Phillip Jungwirth downgraded Pioneer Natural Resources Co (NYSE: PXD) to Market Perform from Outperform rating.
The analyst reduced the rating on its all-stock merger with Exxon Mobil Corp (NYSE: XOM) for $59.5 billion, or $253 per share.
Under the terms of the deal, Pioneer shareholders will receive 2.3234 shares of ExxonMobil for each Pioneer share at closing. The acquisition deal represents an 18% premium to Pioneer's undisturbed closing price on Oct. 5 and a 9% premium to its prior 30-day volume-weighted average price on the same day.
Related: Jim Cramer Urges Reevaluation Following Pioneer's $60B Exxon Deal - 'I Will Sell Every Share...'
The analyst views the deal favorably, with the Permian footprint improved at a reasonable valuation.
"Our revised price target is based on that for XOM and the acquisition exchange ratio. While PXD has only outperformed E&P peers by 3/5% in the last 10/15 trading days, we anticipate the deal to close in 2Q24," Jungwirth wrote.
He revised EPS to $5.73 (from $4.99) for Q3 FY23, $21.57 (from $20.63) for FY23, and $29.63 (from $29.21) for FY24.
Price Action: PXD shares are trading higher by 0.17% at $248.65 on the last check Monday.
Latest Ratings for PXD
| Mar 2022 | Keybanc | Maintains | Overweight | |
| Feb 2022 | Raymond James | Maintains | Strong Buy | |
| Feb 2022 | Piper Sandler | Maintains | Overweight |
View the Latest Analyst Ratings
© 2023 Benzinga.com. Benzinga does not provide investment advice. All rights reserved.