Morgan Stanley Keeps Diamondback (FANG) Overweight as 2025 Guidance Comes Into Focus

Diamondback Energy, Inc. (NASDAQ:FANG) is included among the 14 Best US Stocks to Buy for Long Term.

On November 20, Morgan Stanley analyst Devin McDermott trimmed the firm’s price target on Diamondback Energy, Inc. (NASDAQ:FANG) to $183 from $184, while maintaining an Overweight rating on the shares. The update is part of the firm’s coverage of Energy stocks in North America, based on new guidance for 2025 and the early 2026 outlook. Morgan Stanley still has a preference for gas over oil stocks.

Diamondback Energy, Inc. (NASDAQ:FANG) benefits a lot in comparison to its peers because of its low-cost production. The company’s oil production comes at a lower cost in the US, especially in the Permian Basin. This way, Diamondback steers clear of geopolitical risks that affect many other producers. This has enabled the company to generate free cash flow that was 15% higher per share, despite oil prices being down 14%. This also allows the company to have a low reinvestment rate, preserving more cash flow to return to shareholders.

In its recent earnings report, Diamondback Energy, Inc. (NASDAQ:FANG) highlighted that it is close to its $1.5 billion net debt target, and as a result, it expects to return nearly all of its available cash to shareholders. The major preference, however, is the consistent allocation of base and variable dividends, but the company also sees an opportunity in buying back shares, given the market conditions.

Diamondback Energy, Inc. (NASDAQ:FANG) is a Texas-based independent oil and natural gas company.

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