Diamondback Energy Inc (FANG) saw its shares climb nearly 3% on Tuesday, riding the wave of a bullish energy sector spurred by escalating tensions in the Middle East. The stock’s surge came as Iran launched an attack on Israel following the recent assassination of Hezbollah leader Hassan Nasrallah. Reports indicate that Iran fired between 100 and 200 missiles towards Israel, fueling investor anxiety and pushing energy stocks higher as investors sought safer investments.
Diamondback Energy also received a boost from positive analyst sentiment. Wells Fargo analyst Roger Read maintained an Overweight rating on the stock, albeit lowering the price target from $230 to $219. Despite the reduced price target, it still sits comfortably above the current share price, indicating potential for further growth. This optimistic view echoed similar sentiments expressed by analysts at Evercore ISI Group and Truist Securities on Monday.
After the market closed, Diamondback Energy announced the completion of an acquisition and provided updated guidance for the third quarter. Diamondback subsidiary Viper Energy finalized the acquisition of certain mineral and royalty interest-owning subsidiaries of Tumbleweed Royalty IV for a total consideration of approximately $459 million in cash, 10.1 million OpCo units, and an option for Tumbleweed to acquire the same number of Viper Class B common stock shares as the OpCo units.
The company also revised its third-quarter guidance to incorporate the Endeavor Energy Resources deal, which closed on September 10th. Diamondback now anticipates third-quarter oil production to be between 319 and 321 MBO/d. The company also expects capital expenditures to fall between $675 million and $700 million for the quarter. Diamondback is slated to release its third-quarter financial results on November 4th. Analyst estimates from Benzinga Pro anticipate earnings of $4.56 per share and revenue of $2.331 billion.
Diamondback Energy closed Tuesday at $177.52, representing a 2.97% increase. The stock’s performance reflects a confluence of factors, highlighting the volatile nature of the energy sector and the influence of geopolitical events and investor sentiment on individual company stock prices.
