BMO Capital upgraded Diamondback Energy to Outperform from Market Perform with a price target of $215, up from $205. Following completion of the Endeavor acquisition, Diamondback, along with Exxon Mobil, is now the dominant player in the Midland Basin, the analyst tells investors in a research note. The firm believes this positions Diamondback as a “long-term winner with leading core inventory depth and best in class capital efficiency.” The shares have re-rated but still appear reasonably valued on free cash flow yield given the company’s higher conversion rate, contends BMO.
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