Diamondback Energy, Inc. (FANG), headquartered in Midland, Texas, is an independent oil and natural gas company focused on the acquisition, development, exploration, and exploitation of unconventional, onshore oil and natural gas reserves in the Permian Basin in West Texas. Valued at $35.46 billion by market cap, the company’s activities are focused on the horizontal exploitation of multiple intervals within the Wolfcamp, Spraberry, and Bone Spring formations. The oil and gas company is expected to announce its fiscal second-quarter earnings for 2024 after the market closes on Monday, Aug. 5.
Ahead of the event, analysts expect FANG to report a profit of $4.51 per share on a diluted basis, up 22.6% from $3.68 per share in the year-ago quarter. The company beat the consensus estimates in three of the last four quarters while missing on one other occasion.
For fiscal 2024, analysts expect FANG to report EPS of $18.63, up 3.4% from $18.01 in fiscal 2023.
FANG stock has outperformed the S&P 500’s ($SPX) 13.8% gains on a YTD basis, with shares up 27.7% during this period. Similarly, it outshined the S&P 500 Energy Sector SPDR’s (XLE) 7.6% gains over the same time frame.
On Jul. 15, FANG shares closed up more than 3%, as speculation increased that a Donald Trump win in November’s Presidential election would lead to reduced regulations in U.S. oil drilling.
FANG’s overall performance can be attributed to its agreement to acquire privately held rival Endeavor Energy Partners for $26 billion. This deal could make the combined company the third-largest oil and gas producer in the Permian basin of West Texas and New Mexico, behind Exxon Mobil Corporation (XOM) and Chevron Corporation (CVX).
The combined company could benefit significantly from the oil and gas production boom in the Permian basin, as its combined acreage would be 838,000 acres. The combined entity would pump 816,000 barrels of oil and gas per day (boepd). By combining the acreage and locations in the Permian basin, there could be substantial synergy generation opportunities, with management aiming for $550 million in annual synergies.
Analysts’ consensus opinion on FANG stock is bullish, with a “Strong Buy” rating overall. Out of 26 analysts covering the stock, 20 advise a “Strong Buy” rating, one has a “Moderate Buy” rating, and five recommend a “Hold.” The average analyst price target for FANG is $216.92, indicating a 9.1% potential upside from the current levels.
On the date of publication, Dipanjan Banchur did not have (either directly or indirectly) positions in any of the securities mentioned in this article. All information and data in this article is solely for informational purposes. For more information please view the Barchart Disclosure Policy here.
