Midland, Texas-based Diamondback Energy, Inc. (FANG) is an independent oil and gas company. It acquires, develops, explores, and exploits unconventional, onshore oil and natural gas reserves. With a market cap of $34.7 billion, Diamondback Energy owns and operates midstream infrastructure assets in the Midland and Delaware Basins of the Permian Basin.
The oil & gas giant has substantially outperformed the broader market over the past year. Over the past 52 weeks, FANG surged 31.6%, outpacing the S&P 500 Index’s ($SPX) 26.1% returns. In 2024, FANG is up 25.6% compared to SPX’s 16.5% gains on a YTD basis.
Narrowing the focus, FANG stock outperformed the US Oil & Gas Explor & Prod Ishares ETF’s (IEO) 1.5% returns over the past 52 weeks and 4.1% gains on a YTD basis.
Shares of Diamondback Energy rose 2.4% in the trading session following the release of its Q2 earnings on Aug. 5. The company’s revenue grew 29.4% year over year to $2.5 billion, exceeding Wall Street’s expectations by 13.1%. Its adjusted EPS grew by 22.8% annually to $4.52, surpassing the EPS estimates by 1.4%. Moreover, the company has improved its production outlook for the current fiscal year, making investors enthusiastic.
For the current fiscal year, ending in December, analysts expect Diamondback Energy to report an EPS growth of 5.9% year over year to $19.07. The company’s earnings surprise history is solid. It beat the consensus estimate in each of the last four quarters.
Among the 26 analysts covering the FANG stock, the consensus rating is a “Strong Buy.” That’s based on 20 “Strong Buy” ratings, one “Moderate Buy,” and five “Holds.”
This configuration has been stable over the past months.
However, on Aug. 15, Piper Sandler trimmed Diamondback Energy's price target to $240 from $249, maintaining an “Overweight” rating. The cut reflects a revised view on the oversupplied gas market, lowering mid-cycle gas price forecasts to $3.25 from $4. Additionally, improved operating efficiencies and cycle times are expected to reduce supply costs, prompting a cautious adjustment in their oil forecast.
FANG’s mean price target of $219.42 represents a premium of 12.6% from current price levels. The Street-high target of $286 indicates a potential upside of 46.8%.
On the date of publication, Aditya Sarawgi 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.
