Diamondback Energy (FANG) is expected to deliver a strong Q2, with total and oil production above the midpoint of guidance and cash flow per share projected to be 2% ahead of the Street estimate, UBS Securities said Monday in a note.

The company is scheduled to report Q2 results on Aug. 3.

From an operational perspective, the company remains committed to the "green light" activity framework, and is proceeding with Barnett delineation, which could support 2% production growth in 2027, according to the note.

The brokerage forecasts Q2 cash flow per share of $11.46 versus the Street consensus of $11.23. It also expects the company to reach its $10 billion net debt target in Q3.

Diamondback Energy continues to see a supportive oil environment, and UBS expects it will reiterate its growth plans for the foreseeable future, the note added.

UBS kept a buy rating on Diamondback Energy and lowered its price target to $243 from $246.

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