Melius initiates Diamondback Energy stock with Buy rating, $213 price target

Published 20/08/2025, 12:52
Melius initiates Diamondback Energy stock with Buy rating, $213 price target

Investing.com - Melius Research initiated coverage on Diamondback Energy (NASDAQ:FANG) with a Buy rating and a price target of $213.00 on Wednesday. The company, currently valued at over $40 billion in market capitalization, appears undervalued according to InvestingPro analysis.

The research firm highlighted Diamondback’s position as a Permian Basin pure-play operator with lean operations targeting reserves in the Wolfcamp, Spraberry, and Bone Spring formations.

Melius noted that the company has expanded through aggressive mergers and acquisitions activity, establishing itself as one of the largest acreage holders in the Midland Basin.

The firm specifically pointed to Diamondback’s "lean, scalable low-cost model" as a key strength in its operations.

Diamondback Energy focuses exclusively on the Permian Basin, which is considered one of the most productive oil and gas regions in the United States.

In other recent news, Diamondback Energy reported its second-quarter 2025 earnings, revealing a mixed financial performance. The company missed its earnings per share (EPS) forecast, reporting $2.67 compared to the expected $2.86, a negative surprise of 6.64%. However, Diamondback exceeded revenue expectations, reporting $3.68 billion against the forecasted $3.38 billion, an 8.88% positive surprise. In corporate developments, Diamondback Energy’s subsidiary, Viper Energy (NASDAQ:VNOM), completed the acquisition of Sitio Royalties Corp (NYSE:STR)., leading Diamondback to revise its third-quarter production guidance upward. Analyst firms have made adjustments following these developments. Raymond (NSE:RYMD) James lowered its price target for Diamondback to $212, maintaining a Strong Buy rating, while CFRA reduced its price target to $181, keeping a Buy rating and adjusting its EPS estimates for 2025 and 2026 downward. Additionally, Diamondback raised its fiscal year 2025 production guidance by approximately 2% and reduced its annual capital expenditure budget by 3%. These recent developments highlight Diamondback’s strategic adjustments and market reactions.

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