Diamondback Energy, Inc. (FANG), headquartered in Midland, Texas, operates as an independent oil and natural gas company. With a market cap of $46.8 billion, the company acquires, develops, explores, and exploits unconventional, onshore oil and natural gas reserves in the Permian Basin in West Texas.
Companies worth $10 billion or more are generally described as “large-cap stocks,” and FANG perfectly fits that description, with its market cap exceeding this mark, underscoring its size, influence, and dominance within the oil & gas E&P industry. FANG's concentration on the Permian Basin has resulted in a significant rise in proven reserves, totaling 2.2 billion barrels of oil equivalent. This reserve growth highlights Diamondback's successful exploration and development tactics, supported by strategic acquisitions like the Endeavor Acquisition.
Despite its notable strength, FANG slipped 27.2% from its 52-week high of $214.50, achieved on Jul. 17. Over the past three months, FANG stock declined 12.4%, underperforming the S&P 500 Index’s ($SPX) 4.5% gains during the same time frame.
In the longer term, shares of FANG rose marginally on a YTD basis and over the past 52 weeks, underperforming SPX’s YTD gains of 23.1% and 23.9% returns over the last year.
To confirm the bearish trend, FANG has been trading below its 50-day moving average since early August, experiencing fluctuations. The stock is trading below its 200-day moving average since early September, with some fluctuations.
On Nov. 4, FANG shares closed up more than 2% after reporting its Q3 results. Its adjusted EPS of $3.38 did not meet Wall Street expectations of $3.80. The company’s revenue was $2.6 billion, topping Wall Street forecasts of $2.5 billion.
FANG’s rival, Occidental Petroleum Corporation (OXY), has had a rough ride. OXY's shares plummeted 22.9% on a YTD basis and 22% over the past 52 weeks.
Wall Street analysts are bullish on FANG’s prospects. The stock has a consensus “Strong Buy” rating from the 27 analysts covering it, and the mean price target of $216.74 suggests a potential upside of 38.9% from current price levels.
