Diamondback Energy (FANG) PT Lowered to $214 at Raymond James

Raymond James analyst John Freeman lowered the price target on Diamondback Energy (NASDAQ: FANG) to $214.00 (from $245.00) while maintaining a Strong Buy rating.

The analyst comments "We’re updating estimates post earnings and oil price pullback. As a reminder, FANG beat Street on 4Q earnings and cash flow by 9% and 2% respectively. 4Q production beat RJ/Street by 4% and capex was ~7% below RJ/Street. FY25 guidance had oil volumes roughly in-line with Street, while capex was 5% lower. We do anticipate drilling (i.e. capex) to increase in 2026 due to year-over-year impact of DUCs. Overall, we estimate a ~9% FCF/EV yield while the company is trading at ~5x 2025 EV/EBITDA. FANG has several near-term catalysts with pending non-core asset sales and potential power JV. Overall, we reiterate our Strong Buy rating and lower our target price to $214 due to much lower oil price strip since our previous publication. Double Eagle: We expect the Double Eagle deal to close at the start of 2Q. FANG has a proven track record on the consolidation front driving meaningful synergies from acquisitions. Additionally, management discussed the small remaining opportunity set in the Midland Basin to acquire quality acreage and you can’t control when these opportunities like Double Eagle will present themselves. Capital Efficiency Improvements: A common theme for FANG, well costs now are expected to run between $555-600/ft in the Midland Basin, further improving their peer leading capital efficiency. SimulFracs and clear fluid drilling have been important drivers of the continued cost structure improvements. In 2025, FANG is drilling ~460 wells and completing ~575 wells, utilizing DUCs to effectively reduce 2025 capex"

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