FANG
Diamondback Energy, Inc.
$200.71
Oil & Gas E&P
85%
FCF at Price Deck × Multiple
Strong
·
Conviction
Overvalued
Trading 105.6% above fair value
You pay
$200.71
Bear
$0.00
Fair
$97.63
Bull
$256.08
Bear
$0.00
-100.0%
FCF $1534M × 8x
Fair
$97.63
-51.4%
FCF $2191M × 11x
Bull
$256.08
+27.6%
FCF $2848M × 14x
Key Value Driver
Oil price assumption ($75/bbl base case)
Implied Market Multiple
32.3x
Summary
Our base-case estimate uses a valuation based on free cash flow under different commodity price assumptions and a valuation multiple. We then blend that result with the average analyst price target of $214.79 from 51 analysts, using a 35% weight on analyst consensus. That produces an estimated intrinsic value of $97.63 per share.
Warnings
If oil drops to $60/barrel, the stock could fall -100%. Check whether the company can survive at low prices and still pay its dividend.
Where you think oil prices will settle long-term drives over 80% of this valuation. The biggest risk isn't the company itself — it's getting the commodity price wrong.
Wall Street's average price target is $214.79 (from 51 analysts). Our estimate is 84% below the consensus -- consider that gap carefully.
Key Risks
- Growth DCF inappropriate — commodity volumes do not compound
- Geopolitical premiums are real but historically temporary
- Reserve replacement ratio below 100% for 3 years is existential