Diamondback Energy rides oil's bounce

Summary

The speakers discuss Diamondback Energy as a potential beneficiary of crude oil rebounding from roughly $92 to $95.52 per barrel. They question Morgan Stanley's downgrade, citing oil-price tailwinds, an earnings beat, and previously raised guidance as reasons to remain positive despite choppy trading.

• Crude oil rose $3.24 on the day to $95.52 per barrel.
• Higher WTI prices were described as a tailwind for Diamondback Energy.
• Diamondback shares were described as trading roughly between $187 and $210 recently.
• The stock was reported to be up about 25% year to date.
• Both speakers questioned the timing of Morgan Stanley's downgrade.
• Diamondback previously beat earnings expectations and raised guidance; a buy rating was also mentioned.
• Developments involving Iran and the president were cited as factors shaping the oil outlook.

1. 0:00

   FANG or Diamondback Energy.

2. 0:02

   Because, of course, when crude oil, we were talking about it last week, it was down on Friday. Um it was in the 92s. It starts moving up this week, and it moves all the way up, uh you know, uh with a gain today of $3.24.

3. 0:18

   It's trading at uh where is it right now?

4. 0:22

   95.52, Pete. So, we're still below 100, but higher than we'd like to see.

5. 0:28

   >> Yeah.

6. 0:29

   >> Um but, that's good for a lot of the energy stocks like Diamondback. And a lot of people are betting on this one, Pete. With WTI moving higher, Morgan Stanley downgrade.

7. 0:41

   >> [laughter] >> They They gave that the uh uh the cherries there, Pete. They didn't think that was uh such a smart thing.

8. 0:48

   This thing looks like it's poised to go.

9. 0:51

   And when you're a fracker like these guys are, that's a big thing because they get that last little bit out of the well.

10. 0:58

    >> Yeah. Oil price to the the the tailwinds that are there, John, are there, obviously. We also talk about this thing being pretty choppy. You know, it's it in the last, you know, period of time, you know, about a buck 87 to 210 or somewhere close to that. Um still up 25%

11. 1:17

    year to date. So, uh Morgan Stanley did have this downgrade, but um I I don't know, John. I'm not sure that I would be downgrading this thing right now. I think that there's there's still something to be said about what what we're what's happening with the president, what's happening obviously in Iran, and uh what we see day in and day

12. 1:35

    out. Yes, we've had some great pullbacks. But, then look at today, you know, jumping off of that 92 area, like you said, John, back up over 95. So, that's kind of where we seem to find ourselves right now. They uh They're They're They raised their guidance, which I think I don't know if everybody remembers this. This wasn't just yesterday, but when they had their

13. 1:55

    earnings, they beat, they raised the guidance, you know, the price target was there. Buy rating still there. So, I think there's a lot of reasons why you still would want to be pretty positive right now on Diamondback given what where we are right now with oil.

Transcript from the show's YouTube captions; automatic captions may contain errors. Educational content, not investment advice.