Why Is Diamondback (FANG) Up 5.9% Since Last Earnings Report?

A month has gone by since the last earnings report for Diamondback Energy (FANG). Shares have added about 5.9% in that time frame, outperforming the S&P 500.

Will the recent positive trend continue leading up to its next earnings release, or is Diamondback due for a pullback? Well, first let's take a quick look at the latest earnings report in order to get a better handle on the recent drivers for Diamondback Energy, Inc. before we dive into how investors and analysts have reacted as of late.

Diamondback Energy Q2 Earnings Beat Estimates

Diamondback Energy reported second-quarter 2026 adjusted earnings per share (EPS) of $6.48, which beat the Zacks Consensus Estimate of $5.96 and more than doubled from the year-ago adjusted profit of $2.67. The outperformance was driven by production growth and a 53.1% improvement in the year-over-year realized oil prices.

This Midland, TX-based oil and gas exploration and production company’s revenues of $5.6 billion increased more than 51% from the year-ago quarter and topped the Zacks Consensus Estimate by about 17%, fueled primarily by higher sales of oil, natural gas and natural gas liquids, increased sales of purchased oil and higher revenues from other operating income.

In the second quarter of 2026, Diamondback Energy generated free cash flow and adjusted free cash flow of $2.3 billion. Over the same period, it bought back nearly 756,385 common shares for roughly $141 million at an average price of $186.63 per share, excluding excise taxes.

In July, the board of directors increased the company's share repurchase authorization from $8 billion to $16 billion, effectively doubling the program's capacity. Following this increase, approximately $9.9 billion remains available for future share repurchases under the authorization.

FANG’s board of directors approved a base quarterly dividend of $1.10 per common share for the second quarter of 2026, payable on Aug. 20 to its stockholders of record on Aug. 13.

Q2 Production & Realized Prices

FANG’s production of oil and natural gas averaged 1,017,659 barrels of oil equivalent per day (BOE/d), comprising 51.6% oil. The figure was up 10.6% from the year-ago quarter and beat our model estimate of 969,519.9 BOE/d. While crude and natural gas output increased 5.9% and 16.5% year over year, respectively, natural gas liquids volumes climbed 15.7%.

The average realized oil price during the quarter was $96.82 per barrel, 53.1% higher than the year-ago realization of $63.23. The figure also beat our estimate of $66.12 per barrel. Meanwhile, the average realized natural gas price decreased to a negative $2.15 per thousand cubic feet from 88 cents in the prior year. The figure was also below our model estimate of 60 cents. Overall, the upstream oil and gas company fetched $51.68 per barrel compared with $39.61 a year ago.

Costs & Financial Position

Diamondback Energy’s second-quarter cash operating cost was $10.96 per BOE compared with $10.10 in the prior-year quarter and our estimate of $12.56. The increase in costs compared with the year-ago period reflected a rise in lease operating expenses to $5.96 per BOE from $5.26 in the second quarter of 2025 and an increase in Production and ad valorem taxes to $3.26 per BOE from $2.56 in the prior-year quarter.

However, FANG’s gathering, processing and transportation expenses decreased 29.5% year over year to $1.22 per BOE. Cash G&A expenses also fell in the second quarter of 2026 to 52 cents per BOE from 55 cents in the corresponding period of 2025.

Diamondback Energy logged $996 million in capital expenditure — spending $842 million on operated drilling and completion additions to oil and natural gas properties, and $154 million on non-operated additions. The company booked $2.3 billion in adjusted free cash flow in the second quarter.

As of June 30, the Permian-focused operator had approximately $462 million in cash and cash equivalents and $11.1 billion in long-term debt, representing a debt-to-capitalization of 20.1%.

Q3 & 2026 Guidance

Diamondback Energy updated its 2026 guidance by raising its full-year oil production outlook to more than 522 MBO/d, up from the previous guidance of more than 520 MBO/d, and increasing its total production forecast to over 1,000 MBOE/d from more than 972 MBOE/d. The company maintained its full-year cash capital expenditure guidance at approximately $3.9 billion.

For the third quarter of 2026, the company expects oil production to range between 517 MBO/d and 527 MBO/d, with total combined production projected at 995-1,015 MBOE/d. Third-quarter cash capital expenditures are expected to be between $950 million and $1.05 billion.

How Have Estimates Been Moving Since Then?

Since the earnings release, investors have witnessed a upward trend in fresh estimates.

The consensus estimate has shifted 11.98% due to these changes.

VGM Scores

At this time, Diamondback has a great Growth Score of A, a grade with the same score on the momentum front. Charting a somewhat similar path, the stock was allocated a score of B on the value side, putting it in the top 40% for value investors.

Overall, the stock has an aggregate VGM Score of A. If you aren't focused on one strategy, this score is the one you should be interested in.

Outlook

Estimates have been broadly trending upward for the stock, and the magnitude of these revisions looks promising. Interestingly, Diamondback has a Zacks Rank #3 (Hold). We expect an in-line return from the stock in the next few months.

Performance of an Industry Player

Diamondback is part of the Zacks Oil and Gas - Exploration and Production - United States industry. Over the past month, Comstock Resources (CRK), a stock from the same industry, has gained 20.5%. The company reported its results for the quarter ended June 2026 more than a month ago.

Comstock reported revenues of $353.28 million in the last reported quarter, representing a year-over-year change of -24.9%. EPS of $0.03 for the same period compares with $0.13 a year ago.

For the current quarter, Comstock is expected to post earnings of $0.06 per share, indicating a change of -33.3% from the year-ago quarter. The Zacks Consensus Estimate has changed -36.8% over the last 30 days.

Comstock has a Zacks Rank #4 (Sell) based on the overall direction and magnitude of estimate revisions. Additionally, the stock has a VGM Score of D.

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This article originally published on Zacks Investment Research (zacks.com).

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