In a report released yesterday, Kalei Akamine from Bank of America Securities reiterated a Buy rating on Diamondback (FANG – Research Report), with a price target of $165.00.
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Kalei Akamine has given his Buy rating due to a combination of factors that highlight Diamondback’s strategic positioning and financial resilience. The company has been proactive in managing its operations amidst fluctuating oil prices, as evidenced by its transparent contingency plans and recent decision to cut three rigs, which effectively translates to a more efficient operational setup. This move is expected to save $400 million from the capital plan and aligns with the company’s focus on maintaining strong field efficiencies.
Furthermore, Diamondback’s financial outlook is bolstered by a positive free cash flow impact projected for 2025 and 2026, with a debt-adjusted free cash flow yield that stands out among its peers. The company’s low WTI dividend breakeven points further enhance its defensive positioning, making it an attractive investment in the large-cap oil sector. Despite a slight reduction in discounted cash flow valuation, Diamondback’s combination of defensive strategies and value propositions underscores the Buy rating, positioning it as a top pick in its category.
In another report released today, Evercore ISI also initiated coverage with a Buy rating on the stock with a $165.00 price target.
Based on the recent corporate insider activity of 57 insiders, corporate insider sentiment is positive on the stock. This means that over the past quarter there has been an increase of insiders buying their shares of FANG in relation to earlier this year.