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Fly News Breaks for October 16, 2019
CXO, FANG
Oct 16, 2019 | 07:10 EDT
SunTrust analyst Neal Dingmann downgraded Concho Resources to Hold from Buy with a price target of $70, down from $100, as part of his broader research note previewing Q3 results for E&Ps involved in the Permian basin. The analyst notes that the company has recently highlighted its efforts to remedy "inflated well costs" along with its plans to move to wider spaced projects; but he expects these actions to take time to flow through to the company's overall well profile. Dingmann adds that Concho Resources has already reduced its 2019 oil growth expectations, but she anticipates results to fall short of consensus, forecasting its oil output at 201MMBOE/D vs. 204MMBOE/D seen by the Street and capital expenditure of $680M vs. $646M seen by the Street. As part of his research note, the analyst also lowers his price target on Diamondback Energy (FANG) to $125 from $145, forecasting "more modest growth" in Q3 output after a strong Q2 print. Dingmann still keeps his Buy rating on Diamondback Energy and believes the company will boost its dividend to a "more S&P-500 competitive" level.