In a report released today, Gabriele Sorbara from Siebert Williams Shank & Co maintained a Buy rating on Diamondback (FANG – Research Report), with a price target of $161.00.
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Gabriele Sorbara has given his Buy rating due to a combination of factors that highlight Diamondback’s strategic financial management and operational efficiency. Despite macroeconomic challenges, Diamondback has demonstrated strong financial performance, with its recent quarter’s free cash flow and discounted cash flow per share surpassing expectations. The company has strategically decided to reduce its capital expenditure by 10% to enhance capital efficiency and free cash flow generation, which is a prudent response to the volatile commodity prices.
Moreover, Diamondback’s guidance for the second quarter and the year 2025 reflects a more efficient operational outlook with significantly reduced spending. The company has set its capital expenditure for the second quarter notably below both its previous estimates and market consensus, while only slightly adjusting its oil and total production forecasts. This approach underscores Diamondback’s commitment to maximizing returns and positions it well within the industry, supported by its high-quality Midland Basin assets. Sorbara’s rating reflects confidence in Diamondback’s ability to sustain a strong free cash flow yield and adapt to market conditions effectively.
In another report released today, Evercore ISI also initiated coverage with a Buy rating on the stock with a $165.00 price target.