Diamondback Energy (FANG) Price Target - May 3
Posted: Tue May 03, 2022 9:12 am
From our friends at Stifel
Diamondback Energy, Inc. (FANG, $127.50, Buy; Target $222.00)
Delivers impressive results and increases base dividend 17% - Derrick Whitfield
We view this release as positive. The positives include: i) a total equivalent and oil production beat (1.0% and 0.2% above consensus, respectively, and adjusted for the Delaware asset acquisition) on lower than expected capex (4.7% below consensus), ii) an adjusted EBITDAX beat (4.7% above consensus) driven by strong price realizations (oil and NGLs 8.0% and 6.7% above Stifel) and lower cash operating costs (2.5% below Stifel), and iii) a 17% increase to the base dividend (2.2% annualized yield). The only negative was slightly lower than expected Q222 total equivalent and oil production volumes (0.8% and 0.8% below consensus), albeit on guided Q222 capex 1.8% below consensus and reiterated full-year 2022 guidance. Net-net, Diamondback delivered an impressive quarter in a challenging operating environment while rewarding shareholders with a base-plus-variable dividend of $3.05/share (9.6% annualized yield).
IMO FANG is a "Screaming Buy" up to $150. They have some of the best leasehold in the Permian Basin, an outstanding operating team and consistently beat their production guidance. The Base + Variable dividend will be increasing.
My pre-release valuation of $200 will be increased this afternoon.
Diamondback Energy, Inc. (FANG, $127.50, Buy; Target $222.00)
Delivers impressive results and increases base dividend 17% - Derrick Whitfield
We view this release as positive. The positives include: i) a total equivalent and oil production beat (1.0% and 0.2% above consensus, respectively, and adjusted for the Delaware asset acquisition) on lower than expected capex (4.7% below consensus), ii) an adjusted EBITDAX beat (4.7% above consensus) driven by strong price realizations (oil and NGLs 8.0% and 6.7% above Stifel) and lower cash operating costs (2.5% below Stifel), and iii) a 17% increase to the base dividend (2.2% annualized yield). The only negative was slightly lower than expected Q222 total equivalent and oil production volumes (0.8% and 0.8% below consensus), albeit on guided Q222 capex 1.8% below consensus and reiterated full-year 2022 guidance. Net-net, Diamondback delivered an impressive quarter in a challenging operating environment while rewarding shareholders with a base-plus-variable dividend of $3.05/share (9.6% annualized yield).
IMO FANG is a "Screaming Buy" up to $150. They have some of the best leasehold in the Permian Basin, an outstanding operating team and consistently beat their production guidance. The Base + Variable dividend will be increasing.
My pre-release valuation of $200 will be increased this afternoon.