With a market cap of $44.3 billion, Diamondback Energy, Inc. (FANG) is an independent oil and natural gas exploration and production company focused on the prolific Permian Basin in West Texas and southeastern New Mexico. It specializes in developing the Spraberry and Wolfcamp formations in the Midland Basin and the Wolfcamp and Bone Spring formations in the Delaware Basin.
Companies valued at $10 billion or more are generally considered “large-cap” stocks, and Diamondback Energy fits this criterion perfectly. Headquartered in Midland, Texas, Diamondback drives growth through strategic acquisitions and active drilling in one of the most productive shale regions in the United States.
However, the U.S. energy operator has fallen 28.2% from its 52-week high of $214.50. Diamondback shares have declined 1.6% over the past three months, a less severe decline than the broader Nasdaq Composite's ($NASX) 9.8% decrease during the same period.
Longer term, FANG stock has dipped 6.3% on a YTD basis, which is a less pronounced decline than NASX's 9.4% drop over the same period. Nevertheless, Diamondback Energy has dropped 19.2% over the past 52 weeks, lagging behind NASX's 8.7% gain.
FANG has been trading mostly below its 50-day and 200-day moving averages since last year.
Despite reporting better-than-expected Q4 2024 adjusted EPS of $3.64 and revenue of $3.7 billion on Feb. 24, Diamondback Energy shares fell 2.1% the next day due to a sharp earnings decline from a year ago, mainly driven by weaker realizations. The average realized oil price dropped 9% to $69.48 per barrel, while natural gas prices plunged to $0.48 per Mcf. Rising production and ad valorem taxes and higher cash G&A expenses also signaled cost pressures.
In contrast, rival ConocoPhillips (COP) has outperformed FANG. ConocoPhillips shares have declined 17.4% over the past 52 weeks and a marginal rise on a YTD basis.
Despite FANG's underperformance, analysts remain bullish about its prospects. Among the 29 analysts covering the stock, there is a consensus rating of “Strong Buy,” and it is currently trading below the mean price target of $209.41.
On the date of publication, Sohini Mondal did not have (either directly or indirectly) positions in any of the securities mentioned in this article. All information and data in this article is solely for informational purposes. For more information please view the Barchart Disclosure Policy here.
