UPDATE: Topeka Capital Markets Initiates Diamondback Energy at Buy on Multiple Positive Factors

In a report published Tuesday, Topeka Capital Markets analyst Gabriele Sorbara initiated coverage on Diamondback Energy (NASDAQ: FANG) with a Buy rating and $42.00 price target.

In the report, Topeka Capital Markets noted, “We are initiating coverage of Diamondback Energy (FANG) with a Buy rating and price target of $42.00 per share. FANG is a pure play Permian company, with more than 54,000 net acres, the majority of which are situated in the Wolfcamp shale (among other potential horizontal targets). While the Company is early in its horizontal development, management has executed operationally on its initial Wolfcamp wells and following the recent secondary offering, is well positioned financially to execute. Despite significant outperformance since its IPO (shares up 100.3% since 10/12/12 vs. the Permian players which are up 2.9%), we believe the de-risking of the numerous horizontal plays in the Midland Basin are in the early innings, thus continued success provides upside above and beyond our price target.”

Diamondback Energy closed on Monday at $35.45.