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Investing.com - CFRA has lowered its price target on Diamondback Energy (NASDAQ:FANG) to $181.00 from $196.00 while maintaining a Buy rating on the stock. According to InvestingPro data, the stock appears undervalued, with analysts setting targets ranging from $141 to $228, reflecting a potential 25% upside from current levels.
The research firm reduced its earnings per share (EPS) estimates for the oil producer, cutting its 2025 forecast by $0.61 to $13.26 and its 2026 projection by $0.93 to $15.75. Notably, InvestingPro data shows 12 analysts have recently revised their earnings estimates upward for the upcoming period, with the company maintaining strong profitability metrics including a 74.3% gross margin.
CFRA described Diamondback as a "high-quality operator in the Permian Basin," noting that the company’s cash operating expenses averaged just over $10 per barrel of oil equivalent in the second quarter, representing a sequential decrease of 3.6% and a year-over-year reduction of 13.5%.
The firm acknowledged Diamondback faces approximately $1.3 billion in debt milestones in 2027, resulting from its April 2025 Double Eagle acquisition, but estimated the company would generate nearly $10 billion in free cash flow from 2025 to 2026.
CFRA also noted that Diamondback has signaled a more conservative approach to capital allocation in the near term, which the research firm believes reflects industry caution regarding crude oil price trends, though CFRA expects oil prices to "hold up decently in 2026."
In other recent news, Diamondback Energy Inc . reported its second-quarter earnings for 2025, which showed a mixed financial performance. The company missed its earnings per share (EPS) forecast, recording $2.67 compared to the expected $2.86, resulting in a negative surprise of 6.64%. On a positive note, Diamondback Energy exceeded revenue expectations with actual revenue of $3.68 billion, surpassing the forecasted $3.38 billion by 8.88%. These results highlight a discrepancy between the company’s earnings and revenue performance. Despite the revenue beat, the stock experienced a decline following the earnings release. Analyst firms have not provided any upgrades or downgrades in response to these earnings. Investors may find the revenue figures encouraging, although the EPS miss could be a point of concern. These developments provide crucial insights for stakeholders monitoring Diamondback Energy’s financial trajectory.
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