In a report released today, Tim Rezvan from Oppenheimer maintained a Buy rating on Viper Energy (VNOM), with a price target of $49. The company’s shares closed yesterday at $29.79.
Rezvan noted:
“VNOM units have declined in lockstep with E&Ps QTD ( -28%, versus XOP -30%), despite having no capex and seeing activity levels tethered to high-quality, well- capitalized Permian E&Ps. In response to investor questions about growth prospects amid weak oil prices, we dust off our stress-test methodology and assess the yield outlook for VNOM units under different commodity/production scenarios. Our work on 2019 suggests VNOM units offer a 7.1% yield at strip pricing, and a 5.6% yield in a $40/b WTI world that incorporates more conservative production assumptions. We believe investors are overlooking Diamondback’s ability/incentive to backstop Viper’s production. Investors should also factor in the likelihood that Diamondback delivers an accretive (CF/share basis) dropdown in 2019, which is not in our numbers.”
According to TipRanks.com, Rezvan is a 2-star analyst with an average return of -0.2% and a 46.2% success rate. Rezvan covers the Basic Materials sector, focusing on stocks such as Whiting Petroleum Corp, Gulfport Energy Corp, and Par Pacific Holdings.
The word on The Street in general, suggests a Strong Buy analyst consensus rating for Viper Energy with a $46.11 average price target.
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Based on Viper Energy’s latest earnings release for the quarter ending September 30, the company reported a quarterly net profit of $2.35 million. In comparison, last year the company had a net profit of $26.61 million.
Based on the recent corporate insider activity of 10 insiders, corporate insider sentiment is neutral on the stock.
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Viper Energy Partners LP engages in the acquisition of oil and natural gas properties. It owns, acquires and exploits oil and natural gas properties in North America. The company was founded on February 27, 2014 and is headquartered in Midland, TX.
