Diamondback Energy, Inc. (FANG), headquartered in Midland, Texas, operates as an independent oil and natural gas company. With a market cap of $31.2 billion, the company acquires, develops, explores, and exploits unconventional, onshore oil and natural gas reserves in the Permian Basin in West Texas.
Companies worth $10 billion or more are generally described as “large-cap stocks,” and FANG perfectly fits that description, with its market cap exceeding this mark, underscoring its size, influence, and dominance within the oil & gas E&P industry. FANG delivers robust operational performance driven by surging oil sales. By prioritizing oil production, FANG capitalizes on favorable market prices and demand for crude. The company's efficient scaling and optimal oil-to-gas ratio solidify its competitive advantage in the energy sector.
Despite its notable strength, FANG slipped 18.5% from its 52-week high of $214.50, achieved on Jul. 17. Over the past three months, FANG stock has declined 6%, outperforming the SPDR S&P Oil & Gas Exploration & Production ETF’s (XOP) 9% dip during the same time frame.
In the longer term, shares of FANG rose 12.7% on a YTD basis and climbed 12.2% over the past 52 weeks, outperforming XOP’s YTD losses of 5.2% and 13.5% dip over the last year.
However, FANG has been trading below its 50-day and 200-day moving averages since early September, indicating a recent bearish trend.
FANG's strong performance is driven by potential economic growth in non-OECD nations and possible supply adjustments by OPEC+. Diamondback's merger agreement with Endeavor Energy Resources adds Permian Region assets and significant synergy opportunities, with management aiming for $550 million in annual synergy.
On Aug. 13, FANG shares closed down more than 2% on signs of insider selling after an SEC filing showed CFO Van’t sold $9.9 million of shares.
On Aug. 5, FANG shares closed down more than 2% after reporting its Q2 earnings results. Its adjusted EPS of $4.52 beat Wall Street expectations of $4.46. The company’s revenue was $2.5 billion, topping Wall Street forecasts of $2.2 billion.
FANG’s rival, Occidental Petroleum Corporation (OXY), has had a rough ride. OXY's shares plummeted 14.1% in 2024 alone and 22.5% over the past 52 weeks, lagging behind FANG’s double-digit gains.
Wall Street analysts are highly bullish on FANG’s prospects. The stock has a consensus “Strong Buy” rating from the 24 analysts covering it, and the mean price target of $225.25 suggests a potential upside of 28.9% from current price levels.
On the date of publication, Neha Panjwani 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.
