Analyst Subash Chandra from Benchmark Co. maintained a Buy rating on Diamondback (FANG – Research Report) and keeping the price target at $195.00.
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Subash Chandra has given his Buy rating due to a combination of factors that highlight Diamondback Energy’s strong financial performance and strategic decisions. The company reported an adjusted EBITDA of $2.95 billion, which surpassed both the consensus and Benchmark’s expectations, indicating robust operational efficiency and cost management. Additionally, Diamondback’s decision to reduce its rig count by three reflects a strategic response to policy impacts on oil, with the potential to adjust this should oil prices stabilize above $65 per barrel.
Furthermore, the company’s significant reduction in capital expenditure by $400 million is a prudent move in response to oil price volatility, aiming to enhance rate-of-return visibility. Diamondback’s focus on reducing short-term debt and targeting lower consolidated debt through asset sales and free cash flow generation demonstrates a commitment to strengthening its financial position. These strategic initiatives, combined with the company’s operational performance, underpin Chandra’s positive outlook and Buy rating for Diamondback Energy.
In another report released today, Scotiabank also maintained a Buy rating on the stock with a $175.00 price target.