03:55 PM EDT, 09/17/2024 (MT Newswires) -- Diamondback Energy's ( FANG ) shares are expected to "outperform" its peers over the next 12-month period, RBC Capital Markets said in a note Tuesday.

"Management has built a solid Permian Basin position with a deep inventory of liquids-rich development opportunities," RBC said, adding that Diamondback stands out for its mix of valuable assets, strong economic growth, mineral ownership, and a water business, all of which contribute to its competitive edge.

"We believe [Diamondback] has one of the lowest cost structures in the basin and a corporate cash flow break-even (including dividend) that is among the best in the industry," RBC said.

The investment firm also said Diamondback's merger with Endeavor Energy Resources, which closed on Sept. 10 and added 344,000 net acres in the Permian Basin, should allow it to "now start integrating assets and pull forward the combined synergies." RBC said a $550 million "annual run-rate synergy target" represents a conservative estimate for the company.

RBC said the recent acquisition of Permian royalty acres by Diamondback's subsidiary Viper Energy ( VNOM ) includes assets that "have a good line-of-sight for development given there are core parts of the acreage that are currently undeveloped."

RBC has an outperform rating on Diamondback with a price target of $220.

Price: 179.84, Change: +5.03, Percent Change: +2.88