Diamondback Energy (FANG) Update - Jan 7

[dan_s]

At the time of this post FANG was trading for $121.88.
First Call's price target is $133.52
TipRanks: "In the last 3 months, 21 ranked analysts set 12-month price targets for FANG. The average price target among the analysts is $137.62. The price targets range from $111 to $165."

I have updated my forecast model for FANG, assuming no production growth in 1H 2022 and only 1.2% growth for the full year.
FANG should generate over $5.3 billion of operating cash flow in 2022, which compares to a 2021 capex budget of $1.53 billion. With that much free cash flow and lots of Tier One leasehold, they should ramp up drilling in the summer. Their 2021 D&C program generated over 23% YOY production growth.

My valuation increases $2 to $160.

FANG is one of the Elite Eight in the Sweet 16

FANG recently increased their dividend to $0.50/Quarter and I expect them to keep raising it since their DCF s/b over $20/share in 2022.