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Investing.com - KeyBanc has reiterated an Overweight rating and $17.00 price target on Diversified Energy Co. (NYSE:DEC), currently trading at $14.95, following meetings with management in Oklahoma City this week. According to InvestingPro data, analyst targets range from $14 to $23, with a strong buy consensus.
The meetings occurred one day after Diversified announced an asset-backed securities (ABS) funding agreement of up to $2 billion with Carlyle’s structured credit group. The arrangement will focus on larger scale deals of $250 million or more, with Carlyle maintaining a residual equity interest in the ABS. With revenue of $759 million in the last twelve months and an EBITDA of $214 million, this funding agreement represents a significant opportunity for growth.
KeyBanc highlighted details about Diversified’s MidCon Joint Development Agreement with Mewbourne, noting the Cherokee Shale’s drilling economics with estimated ultimate recoveries of 1.3 million barrels of oil equivalent (50% oil) and authorization for expenditures averaging $515 per foot.
The firm pointed to increasing industry interest in the MidCon area as a positive indicator for Diversified and its substantial leasehold position in Oklahoma.
KeyBanc maintained that the company’s recent pace of $30 million per year in asset sales appears reasonable or potentially conservative as a future target.
In other recent news, Diversified Energy Company PLC announced its first-quarter 2025 trading statement and dividend declaration in a filing with the Securities and Exchange Commission. This announcement is part of the company’s official financial records and is crucial for investors tracking the company’s fiscal health. Additionally, Citi initiated coverage of Diversified Energy with a Buy rating and set a price target of $16. The investment firm highlighted the company’s strengths in managing late-stage oil and gas assets and its strong free cash flow conversion.
Meanwhile, Mizuho (NYSE:MFG) Securities maintained its Outperform rating on Diversified Energy, reaffirming a price target of $23. The rating was supported by discussions with the company’s executives, who emphasized shareholder returns and potential growth opportunities in Oklahoma and Appalachia. Diversified Energy’s management also highlighted the flexibility of its undeveloped Permian acreage and ongoing initiatives in the coal mine methane business. Mizuho’s analysts acknowledged certain risks, such as reliance on mergers and acquisitions, but expressed confidence in the company’s strategic direction. These developments reflect a positive sentiment from analysts regarding Diversified Energy’s future prospects.
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