First Berlin Equity Research has published a research update on Diversified Energy PLC (ISIN: GB00BYX7JT74). Analyst Simon Scholes reiterated his BUY rating and decreased the price target from GBp 1900.00 to GBp 1500.00.

Abstract
Q2/25 hedged revenue rose by 93% to USD446m (Q2/23: USD231m) helped by recent acquisitions, rising commodity prices and a shift in the product mix towards more valuable oil. Adjusted EBITDA jumped 142% to €280m (Q2/24: USD116m). Q2/25 adjusted EBITDA included USD62m in gains on non-core asset and leasehold divestitures (Q2/24: USD6m). The Q2/25 divestiture gains were the largest DEC has ever booked. However, even after these transactions, we believe that the value of the company’s undeveloped acreage in northwest Oklahoma alone is over USD800m. Clean of the divestiture gains, the adjusted EBITDA margin came in at 52% (Q2/24: 48%) which is in line with the longstanding average for this metric of ca. 50%. This suggests that the Maverick acquisition (completed in March, accounted for ca. 30% of Q2/25 volume) has bedded in well. A further Maverick positive is that management has revised guidance for annualised synergies from the acquisition from USD50m to USD60m. For good measure, the Oklahoma JV partnership acquired with Maverick has significant scope to expand its production. As management stated in the results presentation, this suggests significant scope to offset the current 10% annual corporate production decline rate. DEC is trading at a 28% discount to its peer group based on 2025E EV/adjusted EBITDA, but has a superior growth track record. Applying a multiple of 4.8x to our 2025 adjusted EBITDA forecast (a 20% discount to the peers due to their higher market caps) produces a per share valuation for DEC of GBp1,475. We set a new price target of GBp1,500. Due to recent sector multiple compression, our new price target is 21% below the price target of GBp1,900 in our most recent note of 3 July 2025, but still offers upside of 34%. We maintain our Buy recommendation.