Wall Street analyst ratings for Diamondback Energy
As of March 4, 2016, about 85% of Wall Street analysts have rated Diamondback Energy (FANG) as a “buy,” and ~12% of analysts have rated it as a “hold.” That leaves 3% with “sell” ratings for the stock. The median price target from these recommendations is $82.06, which is ~8% higher than the closing price of $75.99 FANG saw on March 4.
By comparison, based on the median price targets of recommendations from Wall Street analysts, Occidental Petroleum (OXY), EQT Corporation (EQT), and Energen Corporation (EGN) have potential upsides of ~3%, ~24%, and ~32%, respectively, from their closing prices on March 4. The SPDR S&P Oil and Gas Exploration & Production ETF (XOP) generally invests at least 80% of its total assets in oil and gas exploration companies.
FANG’s individual recommendations
As shown in above table, the most recent recommendation of “outperform” comes from BMO Capital Markets, which issued its rating on March 3, 2016. BMO Capital Markets assigned FANG the target price of $77, which is ~1% higher than the closing price of $75.99 on March 4, and expects to see this target price in 12 months.
By comparison, SunTrust Robinson Humphrey assigned FANG the highest target price of $95, which is ~25% higher than the stock’s closing price of $75.99 on March 4. SunTrust Robinson Humphrey issued its FANG recommendation in the last week of February 2016 and did not mention any target date for the target price.
The lowest target and positives
By contrast, Canaccord Genuity assigned FANG the lowest target price of $65, which is ~14% lower than the stock’s closing price of $75.99 on March 4. Canaccord Genuity issued its FANG recommendation in the third week of February 2016 and did not mention any target date for the target price.
Some of the positives for FANG’s stock as noted by Wall Street analysts include an excellent asset base and a strong balance sheet.
In the next part, we’ll discuss a key factor in our analysis of FANG: production volumes.