Diamondback Energy (FANG) Update - Feb 22

[dan_s]

FANG, RTLR and VNOM should all be announcing Q4 results after the markets close today.

From Stifel this morning.

Diamondback Energy, Inc. (FANG, $131.47, Buy; Target $158.00) < My valuation is $160
Highlighting FANG as a high conviction idea for this week's earnings - Derrick Whitfield
In our full note, we are highlighting FANG as a high conviction stock pick for this week's earnings. To date, DVN, MRO, and PXD have all reported and outperformed the XOP by ~8% over a 1-2 day period around their respective earnings dates while FANG has traded in-line with the XOP over the same periods. Similar to its peers, we expect FANG to outperform during Q421 earnings on strong operations (modest Q421 oil production beat of ~1%) and advantaged return of capital messaging. Specifically, we project 2022 FCF of over $3.8B and believe management will exceed its commitment to return 50% of FCF to stockholders for 2022 as near-term debt retirement ($1.0B for 2024 maturity) only accounts for 26% of its FCF profile. Net-net, we could see a +70% return of capital to stockholders, equating to a share repurchase/dividend yield of ~11%. Diamondback reports after the close on Tuesday, February 22nd