Morgan Stanley reaffirms its overweight stance on Diamondback Energy (FANG), citing improving operational fundamentals and clarity around 2025 production and capital expenditure guidance. The firm highlights FANG’s strong cash flow generation and disciplined capital allocation as key drivers.
- Diamondback Energy (FANG) forecasts 2025 production between 1.65M and 1.70M BOE/d
- Capital expenditures expected in the $2.8B–$3.0B range for 2025
- Projected 2025 free cash flow of $5.3B under $75 WTI oil scenario
- Finding and development costs below $15 per barrel equivalent
- Morgan Stanley maintains overweight rating based on operational and financial clarity
- FANG has outperformed energy sector benchmarks over the past 12 months
Morgan Stanley has retained its overweight rating on Diamondback Energy (FANG), signaling continued confidence in the company’s long-term performance as market participants assess forward-looking guidance for 2025. The firm notes that recent updates on production targets and capital spending plans have provided greater transparency, allowing investors to better evaluate the company’s trajectory amid shifting energy commodity dynamics. Diamondback Energy has forecasted 2025 production between 1.65 million and 1.70 million barrels of oil equivalent per day (BOE/d), representing a 6% to 8% year-over-year increase from 2024 levels. The company also plans to maintain capital expenditures within the $2.8 billion to $3.0 billion range, emphasizing operational efficiency and low-cost production. These figures reflect a commitment to sustainable growth without overextending financial leverage. The firm’s analysis underscores FANG’s ability to generate robust free cash flow, projecting $5.3 billion in cash flow for 2025 under a $75 WTI oil price scenario. This positions Diamondback to maintain a strong balance sheet, support shareholder returns, and fund organic growth. Morgan Stanley also points to the company’s low finding and development costs—under $15 per barrel equivalent—as a competitive advantage in the current environment. The rating decision impacts investor sentiment across the midstream and exploration & production (E&P) sectors, particularly among U.S. shale producers. FANG’s stock has outperformed broader energy indices in the last 12 months, reflecting market confidence in its execution. The firm’s view may encourage further allocation to high-quality E&P names with clear financial discipline and reserve growth potential.