Industry Analysts Just Upgraded Their Diamondback Energy, Inc. (NASDAQ:FANG) Revenue Forecasts By 28%
Celebrations may be in order for Diamondback Energy, Inc. (NASDAQ:FANG) shareholders, with the analysts delivering a significant upgrade to their statutory estimates for the company. The analysts have sharply increased their revenue numbers, with a view that Diamondback Energy will make substantially more sales than they'd previously expected.
After the upgrade, the 22 analysts covering Diamondback Energy are now predicting revenues of US$4.1b in 2021. If met, this would reflect a substantial 37% improvement in sales compared to the last 12 months. Before the latest update, the analysts were foreseeing US$3.2b of revenue in 2021. The consensus has definitely become more optimistic, showing a considerable lift to revenue forecasts.
View our latest analysis for Diamondback Energy
We'd point out that there was no major changes to their price target of US$60.52, suggesting the latest estimates were not enough to shift their view on the value of the business. The consensus price target is just an average of individual analyst targets, so - it could be handy to see how wide the range of underlying estimates is. Currently, the most bullish analyst values Diamondback Energy at US$94.00 per share, while the most bearish prices it at US$45.00. Note the wide gap in analyst price targets? This implies to us that there is a fairly broad range of possible scenarios for the underlying business.
Another way we can view these estimates is in the context of the bigger picture, such as how the forecasts stack up against past performance, and whether forecasts are more or less bullish relative to other companies in the industry. Next year brings more of the same, according to the analysts, with revenue forecast to grow 37%, in line with its 43% annual growth over the past five years. By contrast, our data suggests that other companies (with analyst coverage) in a similar industry are forecast to see their revenues grow 10% per year. So it's pretty clear that Diamondback Energy is forecast to grow substantially faster than its industry.
The Bottom Line
The most important thing to take away from this upgrade is that analysts lifted their revenue estimates for next year. The analysts also expect revenues to grow faster than the wider market. Seeing the dramatic upgrade to next year's forecasts, it might be time to take another look at Diamondback Energy.
That's a pretty serious upgrade, but shareholders might be even more pleased to know that forecasts expect Diamondback Energy to be able to reach break-even within the next few years. For more information, you can click through to our free platform to learn more about these forecasts.
Of course, seeing company management invest large sums of money in a stock can be just as useful as knowing whether analysts are upgrading their estimates. So you may also wish to search this free list of stocks that insiders are buying.
This article by Simply Wall St is general in nature. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.
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