Diversified Energy initiated with a Buy at Citi

Citi analyst Paul Diamond initiated coverage of Diversified Energy (DEC) with a Buy rating and $16 price target The firm likes the company’s “differentiated” strategy of acquiring and optimizing late-cycle oil and gas wells, evidenced by its low capital spending requirements and “strong” free cash flow conversion. Diversified Energy’s vertically integrated structure and “conservative” hedge book further mitigate commodity price volatility, the analyst tells investors in a research note. Citi views the company’s stable cash flow, low decline rates and well retirement expertise as “key differentiators within the energy sector.”