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Investing.com - Raymond (NSE:RYMD) James lowered its price target on Diamondback Energy (NASDAQ:FANG) to $212.00 from $221.00 on Wednesday, while maintaining a Strong Buy rating following the company’s second-quarter earnings report. According to InvestingPro data, the stock appears undervalued, trading at a P/E ratio of 9.8x with a market capitalization of $40.2 billion.
The firm noted that Diamondback raised its fiscal year 2025 production guidance by approximately 2% and reduced its annual capital expenditure budget by 3%, after previously cutting it by about 10% in the first quarter.
Raymond James forecasts third-quarter production of 912.0 Mboe/d (494.0 Mbbl/d), aligning with guidance and consensus estimates, while its third-quarter capital expenditure estimate of approximately $808 million is about 3% below market expectations.
The firm projects fiscal year 2025 production of approximately 900.1 Mboe/d (489.4 Mbbl/d) with capital expenditures of about $3.5 billion, both in line with guidance and consensus estimates.
Shareholders may benefit from an expected $300 million reduction in fiscal year 2025 cash tax and $268 million from non-core asset divestitures closing in the third quarter, according to the research note. The company maintains a healthy 2.88% dividend yield and has consistently paid dividends for eight consecutive years, as revealed by InvestingPro analysis.
In other recent news, Diamondback Energy reported mixed financial results for the second quarter of 2025. The company missed its earnings per share (EPS) forecast, reporting $2.67 against an expected $2.86, a negative surprise of 6.64%. However, Diamondback exceeded revenue expectations with $3.68 billion, surpassing the forecast of $3.38 billion by 8.88%. Additionally, Diamondback’s subsidiary, Viper Energy (NASDAQ:VNOM), completed its acquisition of Sitio Royalties Corp (NYSE:STR)., prompting Diamondback to raise its third-quarter production guidance to include contributions from the newly acquired assets. In analyst updates, CFRA lowered its price target for Diamondback Energy to $181 from $196, while maintaining a Buy rating. The research firm also adjusted its EPS estimates, reducing the 2025 forecast by $0.61 to $13.26 and the 2026 projection by $0.93 to $15.75. These developments are part of the company’s ongoing efforts to adjust its strategies and financial outlook.
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