By Sam Boughedda
Piper Sandler analyst Mark Lear raised the price target on Diamondback Energy (NASDAQ:FANG) to $196 from $188, maintaining an Overweight rating Friday.
In a note to investors, Lear revisited Diamondback's operations in the northern Midland Basin, which is expected to get the lion’s share (80% of the D&C budget) of allocation in 2022.
"In the wake of the QEP and Guidon acquisitions that closed in 1H21, and the VNOM acquisition of the Swallowtail minerals package in 2H21, the company has messaged as much as a third of company-wide activity would be in the Robertson/Sale ranch area in SE Martin County where FANG has a ~5% royalty uplift," wrote Lear. "We revisit our northern Midland Wolfcamp and Spraberry type curves, and look at recent vintage activity in the Robertson/Sale ranch area which points to improving capital efficiency in 2H22+."
The analyst raised the price target on the stock as Piper Sandler believes "operational and shareholder return catalysts (anticipate base dividend pushing to $3/sh) should continue to close the performance gap between FANG and peers."
Diamondback shares are down 1.5% late Friday.