Party Time: Brokers Just Made Major Increases To Their Diamondback Energy, Inc. (NASDAQ:FANG) Earnings Forecasts

Diamondback Energy, Inc. (NASDAQ:FANG) shareholders will have a reason to smile today, with the analysts making substantial upgrades to this year's forecasts. Consensus estimates suggest investors could expect greatly increased statutory revenues and earnings per share, with analysts modelling a real improvement in business performance.

Following the upgrade, the most recent consensus for Diamondback Energy from its 16 analysts is for revenues of US$11b in 2024 which, if met, would be a substantial 24% increase on its sales over the past 12 months. Statutory earnings per share are presumed to increase 5.4% to US$20.41. Before this latest update, the analysts had been forecasting revenues of US$9.1b and earnings per share (EPS) of US$18.51 in 2024. So we can see there's been a pretty clear increase in analyst sentiment in recent times, with both revenues and earnings per share receiving a decent lift in the latest estimates.

Check out our latest analysis for Diamondback Energy

Although the analysts have upgraded their earnings estimates, there was no change to the consensus price target of US$224, suggesting that the forecast performance does not have a long term impact on the company's valuation.

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. It's clear from the latest estimates that Diamondback Energy's rate of growth is expected to accelerate meaningfully, with the forecast 53% annualised revenue growth to the end of 2024 noticeably faster than its historical growth of 24% p.a. over the past five years. Compare this with other companies in the same industry, which are forecast to grow their revenue 2.2% annually. Factoring in the forecast acceleration in revenue, it's pretty clear that Diamondback Energy is expected to grow much faster than its industry.

The Bottom Line

The most important thing to take away from this upgrade is that analysts upgraded their earnings per share estimates for this year, expecting improving business conditions. Fortunately, analysts also upgraded their revenue estimates, and our data indicates sales are expected to perform better than the wider market. The lack of change in the price target is puzzling, but with a serious upgrade to this year's earnings expectations, it might be time to take another look at Diamondback Energy.

Even so, the longer term trajectory of the business is much more important for the value creation of shareholders. At Simply Wall St, we have a full range of analyst estimates for Diamondback Energy going out to 2026, and you can see them free on our platform here..

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 with high insider ownership.

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at) simplywallst.com.

This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. 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.