Analysts Are Downgrading These 5 Energy Stocks

In this article, we discuss the 5 energy stocks that analysts are downgrading. If you want to read about some more energy stocks with bearish ratings, go directly to Analysts Are Downgrading These 10 Energy Stocks. 

5. Diamondback Energy, Inc. (NASDAQ:FANG)

Number of Hedge Fund Holders: 45 

Diamondback Energy, Inc. (NASDAQ:FANG) is an independent oil and gas firm headquartered in Texas. As peace talks between Russia and Ukraine show signs of progress, a brief lull in oil prices has once again been replaced by a bull market in light of emerging supply concerns. On February 22, the energy firm, which is trying to establish a dividend legacy, declared a quarterly dividend of $0.60 per share, an increase of 20% from the previous dividend of $0.50. The forward yield was 1.87%. 

On March 8, Bank of America analyst Doug Leggate downgraded Diamondback Energy, Inc. (NASDAQ:FANG) stock to Neutral from Buy but raised the price target to $170 from $165, citing “strong share performance and elevated commodity risk” as some of the prime reasons behind the ratings update. 

Among the hedge funds being tracked by Insider Monkey, Chicago-based investment firm Harris Associates is a leading shareholder in Diamondback Energy, Inc. (NASDAQ:FANG) with 3 million shares worth more than $327 million.   

In its Q4 2021 investor letter, Miller Value Partners highlighted a few stocks and Diamondback Energy, Inc. (NASDAQ:FANG) was one of them. Here is what the fund said:

“Diamondback Energy, Inc. (NASDAQ:FANG) returned 14.4% in the quarter as oil price rose and fell during the quarter ending the period largely in the same place that it started. The company reported strong 3Q results beating on the top and bottom line. Diamondback Energy, Inc. (NASDAQ:FANG) reported revenue of $1.9B beating consensus of $1.5B with EPS of $2.94 beating expectations for $2.79. The beat was driven by a combination of higher volumes, higher realizations, and efficiency gains. The company increased its total production guidance for the year to 370-372mboe/d1 (up from 363-370mboe/d) while lowering Capital Expenditure (CAPEX) guidance for the second time this year to $1.49-1.53B. Diamondback Energy, Inc. (NASDAQ:FANG) raised the dividend for the third time this year to $2/share annually while authorizing a new $2B share repurchase program. Starting in 4Q21, the company plans to return 50% of Free Cash Flow to shareholders through the base dividend and a combination of buybacks and special dividends. Finally, the CEO Travis Stice announced plans to reduce methane emissions by 70% as part of the firm’s ESG initiative.”