Oil and natural gas company Diamondback Energy, Inc. (FANG) has reported better-than-expected results for the second quarter ended June 30, 2021. The company’s robust results were driven by the growth it witnessed in revenues.
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Following the earnings, shares of the company appreciated marginally to close at $77 in the extended trading session.
Reported quarterly revenues stood at $1.68 billion, up from last year’s $425 million, surpassing the Street’s estimate of $1.32 billion. This growth can be attributed primarily to the rise in oil, natural gas and natural gas liquid revenues, which rose almost 305% from last year.
Earnings per share (EPS) of $2.40 grew substantially from the previous year’s figure of $0.15. Further, it topped the consensus estimate of $2.12.
Notably, the company expects third-quarter capital expenditure to be in the range of $430-$480 million.
The CEO of Diamondback, Travis Stice, said, “Diamondback built on its track record of execution in the second quarter, generating $578 million of Free Cash Flow. Operationally, capital efficiency continues to improve. As a result, we are cutting our 2021 capital budget by $100 million due to cost control and volume outperformance. Put simply, we are doing more with less: producing more barrels with less capital, fewer completed wells and fewer drilling rigs.” (See Diamondback stock chart on TipRanks)
Recently, Susquehanna analyst Biju Perincheril reiterated a Buy rating on the stock. The analyst, however, raised the price target from $100 to $103, which implies upside potential of 34.2% from current levels.
Consensus among analysts is a Strong Buy based on 16 Buys and 1 Hold. The average Diamondback price target of $11.76 implies 45.6% upside potential from current levels.
Diamondback scores a 7 out of 10 on TipRanks’ Smart Score rating system, indicating that the stock is likely to perform in line with the market expectations. Shares have gained 91.8% over the past year.
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