Diamondback Energy (FANG) Commits to Returning 75% of FCF - Mizuho Securities

Mizuho Securities analyst Vincent Lovaglio reiterated a Buy rating and $233.00 price target on Diamondback Energy (NASDAQ: FANG) after management announced that its Board approved an increase to its return of capital commitment to at least 75% of FCF starting in 3Q22 (up from 50%).

The analyst stated "With oil prices over $100/bbl, payouts in our coverage are 10%+ based on cash return frameworks committing to 50%+ of FCF. On top of near-term yield, excess FCF back to the balance sheet for deleveraging enables enhanced commitments over time. We forecast at 75% payout that FANG could take net debt to ~$3.6Bn by YE23, implying ~0.5x net debt/EBITDAx at run-rate $60/bbl WTI. We maintain our Buy rating on FANG and remain positive on the E&Ps."

For an analyst ratings summary and ratings history on Diamondback Energy click here. For more ratings news on Diamondback Energy click here.

Shares of Diamondback Energy closed at $122.29 yesterday.

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