Gabriele Sorbara, an analyst from Siebert Williams Shank & Co, reiterated the Buy rating on Diamondback (FANG – Research Report). The associated price target remains the same with $230.00.
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Gabriele Sorbara has given his Buy rating due to a combination of factors, including Diamondback’s strategic acquisition of Double Eagle IV Midco, LLC. The transaction, valued at approximately $4.08 billion, involves a significant portion of cash and is expected to enhance cash flow and free cash flow per share. Additionally, Diamondback’s commitment to reducing its debt levels through non-core asset sales further supports its financial stability and growth prospects.
Furthermore, Diamondback’s acquisition expands its asset base in the Midland Basin, adding substantial drilling locations, which are expected to bolster its production capabilities. Despite the acquisition slightly increasing the company’s EV/EBITDA multiple, the overall long-term financial outlook remains positive, with a strong sustainable free cash flow yield. Sorbara maintains the Buy rating and a price target of $230, supported by the company’s robust position in the Permian Basin and anticipated synergies from the recent acquisition.
Sorbara covers the Energy sector, focusing on stocks such as Comstock Resources, EQT, and Antero Resources. According to TipRanks, Sorbara has an average return of 18.0% and a 52.72% success rate on recommended stocks.
In another report released today, Barclays also maintained a Buy rating on the stock with a $210.00 price target.