Diamondback (FANG – Research Report), the Energy sector company, was revisited by a Wall Street analyst yesterday. Analyst Kalei Akamine from Bank of America Securities maintained a Buy rating on the stock and has a $165.00 price target.
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Kalei Akamine has given his Buy rating due to a combination of factors that highlight Diamondback’s potential and strategic positioning. The valuation of Diamondback’s Delaware asset is a focal point, with its worth estimated between $4.6 billion and $6.7 billion, depending on development strategies. The current asset maintenance mode could shift to growth, potentially increasing its value significantly if a more aggressive development plan is adopted.
Additionally, the possibility of monetizing the Delaware asset could provide Diamondback with a substantial financial advantage. A sale could significantly reduce its $13.9 billion debt, addressing investor concerns about its financial defensiveness despite its low dividend breakeven point. The combination of a strong asset portfolio, potential for growth, and financial restructuring opportunities underpins the Buy rating, supported by a favorable free cash flow yield at current oil price levels.
Akamine covers the Energy sector, focusing on stocks such as Diamondback, Devon Energy, and Coterra Energy. According to TipRanks, Akamine has an average return of 5.0% and a 60.81% success rate on recommended stocks.
In another report released yesterday, Siebert Williams Shank & Co also maintained a Buy rating on the stock with a $176.00 price target.