Diamondback Energy (FANG) Valuation Update - Feb 22

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dan_s
Posts: 34465
Joined: Fri Apr 23, 2010 8:22 am

Diamondback Energy (FANG) Valuation Update - Feb 22

Post by dan_s »

I have updated my forecast/valuation model for FANG and posted it to the EPG website. My valuation is now $186/share.
At the time of this post, FANG was trading at $136.30. < My fixed + variable dividend forecast for 2023 is $10.58, for annualize yield of 7.76%.


TipRanks: "In the last 3 months, 14 ranked analysts set 12-month price targets for FANG. The average price target among the analysts is $179.54. The 14 price targets range from $135 to $210."

Diamondback is in our High Yield Income Portfolio. Their stock repurchase program has the potential to significantly increase per share results and their quarterly dividend. The next dividend (based on Q4 2022 results) will be $2.95 on March 10.

DIVIDEND DECLARATIONS

Diamondback announced today that the Company's Board of Directors declared a base cash dividend of $0.80 per common share for the fourth quarter of 2022 payable on March 10, 2023, to stockholders of record at the close of business on March 3, 2023.

The Company's Board of Directors also declared a variable cash dividend of $2.15 per common share for the fourth quarter of 2022 payable on March 10, 2023, to stockholders of record at the close of business on March 3, 2023.

Future base and variable dividends remain subject to review and approval at the discretion of the Company's Board of Directors.

COMMON STOCK REPURCHASE PROGRAM

On September 15, 2021 the Board of Directors of Diamondback authorized the Company to acquire up to $2.00 billion of common stock. On July 28, 2022, Diamondback's Board of Directors approved increasing total authorized common stock repurchases to $4.00 billion. During the fourth quarter of 2022, Diamondback repurchased 2,344,850 shares of common stock at an average share price of $134.49 for a total cost of approximately $316 million. To date, Diamondback has repurchased 13,182,907 shares of common stock at an average share price of $119.64 for a total cost of approximately $1.58 billion. Diamondback intends to purchase common stock under the common stock repurchase program opportunistically with cash on hand, free cash flow from operations and proceeds from potential liquidity events such as the sale of assets. This repurchase program has no time limit and may be suspended from time to time, modified, extended or discontinued by the Board at any time. Purchases under the repurchase program may be made from time to time in privately negotiated transactions or open market transactions in compliance with Rule 10b-18 under the Securities Exchange Act of 1934, as amended, and will be subject to market conditions, applicable legal requirements and other factors. Any common stock purchased as part of this program will be retired.
Dan Steffens
Energy Prospectus Group
dan_s
Posts: 34465
Joined: Fri Apr 23, 2010 8:22 am

Re: Diamondback Energy (FANG) Valuation Update - Feb 22

Post by dan_s »

Note from Neal Dingmann at Truist Financial on 2-23-2023

Diamondback Energy, Inc. (FANG, $134.21, Buy) - Nothing
to See Here...Just Hitting Numbers - Diamondback continues
with their capital/operationally efficient plan generating stable
production and nearly sequentially flat FCF despite the potential​
for notably sequentially lower commodity prices. We continue
to highlight the company’s industry-leading FCF generated
per barrel as one of many notable results driven by the strong
plan. We forecast no change to FANG’s nearly 70% FCF
payout leading to the 8.6% current dividend yield
and potentially
another ~$3B of stock repurchases this year all while debt
repayment continues. We reiterate our Price Target of $200. -
Neal Dingmann
Dan Steffens
Energy Prospectus Group
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