Diamondback Energy (FANG) Update - Nov 11

[dan_s]

Diamondback did report somewhat disappointing results for Q3, but IMO the stock is oversold. The "disappointment" was caused my FANG's very low realized prices for their natural gas and NGLs. They are in an area of the Permian Basin that still lacks sufficient pipeline takeaway capacity; that problem will soon be solved.

Last week 9 highly respected energy sector analysts published new reports on FANG. All 9 rate it a BUY with valuations of $110 to $151 (Merrill Lynch). First Call's price target is now $132.

FANG is trading at $74.54 this morning.

I'm reviewing the updated profile on FANG that was prepared by one of Top Shelf MBA's from SMU. We will publish it Tuesday morning. My updated forecast/valuation model is already on the EPG website.