Midland, Texas-based Diamondback Energy, Inc. (FANG) is an independent oil and natural gas company with a market cap of $56.3 billion. It acquires, develops, explores, and exploits unconventional, onshore oil and natural gas reserves.
This energy company has considerably outperformed the broader market over the past 52 weeks. Shares of FANG have soared 43.4% over this time frame, while the broader S&P 500 Index ($SPX) has soared 25.2%. Moreover, on a YTD basis, the stock is up 35.4%, compared to SPX’s 8.1% rise.
Looking closer, FANG has also outpaced the State Street Energy Select Sector SPDR ETF (XLE), which rose 38.9% over the past 52 weeks and 33% on a YTD basis.
On May 4, shares of FANG surged 2.9% after delivering better-than-expected Q1 results. The company’s revenue increased 4.7% year-over-year to $4.2 billion, topping analyst estimates by a notable margin of 10.4%, while its adjusted EPS of $4.23 handily exceeded consensus expectations of $3.55. Management attributed the quarter’s performance to robust oil production growth, driven by operational improvements in well completions and field automation.
For the current fiscal year, ending in December, analysts expect FANG’s EPS to grow 42.4% year over year to $19.04. The company’s earnings surprise history is mixed. It topped the consensus estimates in three of the last four quarters, while missing on another occasion.
Among the 31 analysts covering the stock, the consensus rating is a "Strong Buy,” which is based on 24 “Strong Buy,” three "Moderate Buy," and four "Strong Sell” ratings.
The configuration is less bullish than a month ago, with 25 analysts suggesting a “Strong Buy” rating.
On May 14, Hanwen Chang from Wells Fargo reiterated a “Buy” rating on FANG, with a price target of $262, indicating a 28.7% potential upside from the current levels.
The mean price target of $227.28 suggests an 11.7% premium to its current price levels, while its Street-high price target of $277 implies a 36.1% potential upside.
