Why Diamondback Energy Is Still a Buy Despite Oil Price declines
September 2, 2022
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The investment thesis for Diamondback Energy($NASDAQ:FANG) is still complex due to the high valuation triggered by elevated oil and gas prices, which are now going down after the FED signaled that it would continue hiking interest rates even if it is at risk of triggering a recession. Oil prices are below $90 per barrel, which is down compared to the $135+ per barrel experienced a few months earlier. It is time to take some profits off.
However, Diamondback Energy should be considered a long-term investment, and it is reasonable to accumulate the stock on any significant weakness. The recent decline in oil prices will affect Diamondback Energy’s market and earnings in the long term.
However, the company’s long-term prospects remain positive, and it is reasonable to accumulate the stock on any significant weakness.
Stock Price
On Thursday, Diamondback Energy stock opened at $130.5 and closed at $130.3. The company has a strong balance sheet and is one of the best-positioned companies to weather the current storm. In addition, Diamondback Energy has a large inventory of high-quality oil reserves that will be valuable in the future.
VI Analysis
The company’s fundamentals reflect its long term potential, below analysis on DIAMONDBACK ENERGY are made simple by VI app. Based on VI Risk Rating, DIAMONDBACK ENERGY is a medium risk investment in terms of financial and business aspects.
However, you may look at what are the business and financial areas presenting potential risks in our website.
Summary
Diamondback Energy Inc is an oil and natural gas exploration and production company based in Midland, Texas. The company’s operations are focused in the Permian Basin in West Texas. The company has a large amount of debt, but it is manageable and the company has been able to increase production and reserves while reducing costs. The current oil price environment is challenging, but Diamondback Energy is well positioned to weather the storm and emerge as a stronger company.
