Diamondback Energy, Inc. (FANG), located in Midland, Texas, is an independent oil and gas company specializing in the acquisition, development, exploration, and exploitation of unconventional onshore oil and natural gas reserves. Valued at a market cap of $53.1 billion, it operates midstream infrastructure assets in both the Midland and Delaware Basins of the Permian Basin.
The oil & gas titan has lagged behind the broader market over the past year. Over the past 52 weeks, FANG surged 15.4%, trailing the S&P 500 Index’s ($SPX) 31.1% returns. In 2024, FANG is up 16.2% compared to SPX’s 24.1% gains on a YTD basis.
Narrowing the focus, FANG stock outperformed the iShares U.S. Oil & Gas Exploration & Production ETF’s (IEO) 5.2% returns over the past 52 weeks and 6.3% gains on a YTD basis.
On Nov. 4, FANG released its Q3 earnings report, and its shares rose by 4.6% in the following trading session. Its adjusted EPS of $3.38 failed to meet Wall Street’s expectations, but its revenue of $2.7 billion surpassed the market’s estimates.
For the current fiscal year, ending in December, analysts expect Diamondback Energy to report an EPS decline of 9.1% year over year to $16.37. The company’s earnings surprise history is mixed. It beat the consensus estimate in three of the last four quarters, while missing on another occasion.
Among the 25 analysts covering the FANG stock, the consensus rating is a “Strong Buy.” That’s based on 19 “Strong Buy” ratings, three “Moderate Buy,” and three “Holds.”
This configuration is more bullish than two months, with 18 analysts suggesting a “Strong Buy” for the stock.
On Nov. 19, Raymond James Financial, Inc. (RJF) raised its price target for Diamondback Energy to $237 from $232, maintaining a “Strong Buy” rating. The firm noted that while Diamondback’s production, capex, and pricing had been pre-released, the company made a strategic acreage trade, strengthening its Midland Basin position and selling some legacy PDP-heavy acreage in Delaware. Raymond James increased its 2025 production estimates by 10 mboe/d, driven by higher NGL and gas volumes, and reduced its 2025 capex estimate to $4 billion from $4.25 billion.
FANG’s mean price target of $218.72 represents a premium of 41.6% from current price levels. The Street-high target of $255 indicates a potential upside of 21.4%.
