Diamondback downgraded to Underperform at BofA with valuation ‘disconnected’

As previously reported, BofA analyst Doug Leggate downgraded Diamondback Energy to Underperform from Neutral with a $143 price target. Street price targets for Diamondback have continued to move higher, leaving "valuation disconnected" given his analysis that suggests that at strip prices the stock is overvalued by about 30%. Similar observations can be made for the broader sector, but he still sees upside potential at his base case for many of those peers, which is the not the case for Diamondback, Leggate tells investors.