Diamondback (FANG) Surges 3.7%: Is This an Indication of Further Gains?
Diamondback Energy (FANG) shares soared 3.7% in the last trading session to close at $154.91. The move was backed by solid volume with far more shares changing hands than in a normal session. This compares to the stock's 5.2% gain over the past four weeks.
FANG stock surged on Friday, driven by a mix of company-specific developments and broader market dynamics. The company's recent amendment to its credit agreement with Wells Fargo Bank—extending the maturity to 2030 and reducing interest rates—boosted investor confidence in its financial stability and flexibility. Meanwhile, escalating tensions between Israel and Iran drove oil prices sharply upward, providing a boost to U.S. shale producers such as Diamondback Energy. The conflict raised concerns over the security of the Strait of Hormuz, a critical maritime chokepoint through which about one-fifth of the world's oil supply passes. Any threat to this route tends to send shockwaves through global energy markets, triggering price spikes and increased volatility. As a result, the Midland, TX-based oil and gas exploration and production company benefited from bullish sentiment, as investors anticipated higher oil prices and potential supply disruptions from the region.
This energy exploration and production company is expected to post quarterly earnings of $2.72 per share in its upcoming report, which represents a year-over-year change of -39.8%. Revenues are expected to be $3.41 billion, up 37.2% from the year-ago quarter.
Earnings and revenue growth expectations certainly give a good sense of the potential strength in a stock, but empirical research shows that trends in earnings estimate revisions are strongly correlated with near-term stock price movements.
For Diamondback, the consensus EPS estimate for the quarter has been revised 6.4% lower over the last 30 days to the current level. And a negative trend in earnings estimate revisions doesn't usually translate into price appreciation. So, make sure to keep an eye on FANG going forward to see if this recent jump can turn into more strength down the road.
The stock currently carries a Zacks Rank #3 (Hold). You can see the complete list of today's Zacks Rank #1 (Strong Buy) stocks here >>>>
Diamondback belongs to the Zacks Oil and Gas - Exploration and Production - United States industry. Another stock from the same industry, Comstock Resources (CRK), closed the last trading session 1.1% lower at $25.33. Over the past month, CRK has returned 5%.
Comstock's consensus EPS estimate for the upcoming report has remained unchanged over the past month at $0.16. Compared to the company's year-ago EPS, this represents a change of +180%. Comstock currently boasts a Zacks Rank of #3 (Hold).
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