Diversified Energy Company PLC (LSE:DEC, NYSE:DEC) is tipped to add substantial value to its current market price, as the US-focussed mature oil and gas firm continues to impress with its operating and financial performance.
In London, stockbroker Stifel has repeated a ‘Buy’ recommendation with an NAV-based price target pitched at 2,018p – versus the current price of 1,145p.
It comes after DEC yesterday released interims that confirmed a portfolio continues to deliver consistent returns.
DEC reported second-quarter 2025 revenue of $510 million and earnings (adjusted EBITDA) of $280 million. It saw $88 million of adjusted free cash flow.
Production averaged 192,000 barrels of oil equivalent per day in the six-month period.
DEC noted that the integration of the Maverick Natural Resources assets is on track, and its synergy targets have raised $60 million.
“Diversified continues to show different ways to find value, and we ultimately expect this ability and exposure to key commodity trends to drive our valuation forward,” Stifel said in a new note.
The broker added: “Guidance has been maintained, which has been supported by capex trending towards the lower end of the range, higher Maverick synergies and higher non-core asset disposals.”
A strong first half
The broker’s view echoed a bullishness in the company’s own reporting.
“Our strong first-half performance reflects the resilience of our business model, the quality of our assets, and the dedication of our talented teams,” chief executive Rusty Hutson said on Monday.
“With the successful integration of Maverick progressing on schedule, we are already realising meaningful synergies and operational efficiencies that enhance our ability to optimise cash flow in our expanded portfolio and drive long-term value from our investments.”
In the year-to-date, the company has returned $105 million to shareholders through dividends and share repurchases.
At quarter-end, liquidity was marked at $416 million and the leverage ratio was 2.6x.
Rusty Hutson, meanwhile, highlighted the agreed strategic partnership with The Carlyle Group, which includes some $2 billion of investment commitment, and said it marked “a transformational milestone” for the company.
“It strengthens our ability to scale responsibly, in a non-dilutive manner, while preserving our disciplined approach to capital allocation,” he said.
Hutson added: “We remain focused on unlocking value across our portfolio through asset optimisation, which resulted in approximately $70 million of additional cash flow, high-return projects with our targeted capital investments, and the continuation of portfolio optimisation through Smarter Asset Management (SAM) programs.”
“We remain confident in our ability to continue delivering consistent and resilient free cash flow, maintaining a strong balance sheet, and returning meaningful capital to shareholders.”