Bank of America just raised its EUR/USD forecast
On Wednesday, JPMorgan analyst Arun Jayaram revised the price target for Diamondback Energy (NASDAQ:FANG) shares, reducing it to $161 from the previous $167 while maintaining an Underweight rating. The adjustment follows the company’s first-quarter results for 2025 and updated guidance. The energy company, currently valued at $38.61 billion, trades at an attractive P/E ratio of 8.13x and offers a dividend yield of 4.93%. According to InvestingPro analysis, the stock appears undervalued at current levels.
Jayaram detailed the changes in earnings per share (EPS) and cash flow per share (CFPS) estimates for the years 2025 and 2026. The new EPS forecasts are set at $13.38 for 2025 and $10.93 for 2026, lowered from $14.07 and $11.38, respectively. Similarly, CFPS estimates have been adjusted to $30.28 for 2025 and $28.70 for 2026, down from $32.32 and $30.28. InvestingPro data reveals that 10 analysts have recently revised their earnings downward for the upcoming period, though the company maintains strong profitability with a 74.76% gross margin.
The updated model from JPMorgan takes into account oil and gas price projections for the next two years. The prices are estimated at $64.02 per barrel and $3.56 per thousand cubic feet (Mcf) for 2025, with a slight decrease to $60.02 per barrel and an increase to $4.02 per Mcf for 2026.
Despite the lowered price target, the analyst recognized Diamondback Energy’s position as a low-cost operator with a strong focus on capital efficiency and cash returns. The company, which operates primarily in the Midland Basin, is committed to enhancing capital efficiency by achieving further efficiency gains in the field. InvestingPro highlights that Diamondback has maintained dividend payments for 8 consecutive years, demonstrating consistent shareholder returns despite market fluctuations. Get access to the comprehensive Pro Research Report for deeper insights into FANG’s operational efficiency and financial health.
Diamondback Energy is expected to maintain flat to low-single-digit volume growth while planning to return 50% of its free cash flow (FCF) to shareholders on a quarterly basis. The acquisition of Endeavor assets is also anticipated to provide Diamondback with additional inventory to create long-term value in the Permian region. The company’s impressive revenue growth of 47.83% in the last twelve months and EV/EBITDA ratio of 5.86x suggest strong operational performance and reasonable valuation metrics.
In other recent news, Diamondback Energy Inc . reported impressive financial results for the first quarter of 2025, exceeding Wall Street’s expectations. The company achieved an earnings per share of $4.83, surpassing the anticipated $3.69, while revenue reached $4.05 billion, above the projected $3.63 billion. Diamondback Energy plans to allocate a significant portion of its free cash flow to debt reduction and share buybacks, despite challenges in the market due to oversupply concerns from OPEC and slowing global demand. The company has made operational adjustments, including reducing the number of drilling rigs and frac crews, focusing on completion efficiency. Analysts from Goldman Sachs and RBC Capital Markets noted the company’s strategic capital allocation and its ability to manage through challenging market conditions. Diamondback Energy’s future plans include stabilizing production at 485,000 barrels per day by the fourth quarter of 2025, with potential increases if oil prices rise. The company remains committed to maintaining operational flexibility and maximizing shareholder value amidst evolving market dynamics.
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