KeyBanc Trims Price Target on Viper Energy (VNOM) to $54, Keeps Overweight

Viper Energy Inc. (NASDAQ:VNOM) is one of the best high beta stocks to buy now. On September 3, KeyBanc analyst Tim Rezvan lowered his price target on Viper Energy Inc. (NASDAQ:VNOM) to $54 from $56 while maintaining an Overweight rating. The adjustment reflected revised natural gas price forecasts and updated production estimates following the acquisition of Sitio Royalties Corp. (NYSE:STR).

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Despite the modest revision, sentiment across Wall Street remains strongly supportive, with all covering analysts rating the stock a Buy or equivalent. This view is supported by the recent initiation by William Blair’s Neal Dingmann who began coverage on August 25 with a Buy rating. He emphasized Viper Energy Inc.’s (NASDAQ:VNOM) position as the largest public minerals company.

The analyst believes that Viper Energy Inc.’s (NASDAQ:VNOM) extensive royalty acreage provides a strong foundation for sustained per-share growth and above-industry margins. This positioning underpins a high rate of shareholder returns while limiting exposure to capital and inflationary pressures, as per the analyst.

For the near-term, the analyst said key drivers such as ongoing organic expansion, selective acquisitions, and buybacks should support earnings growth. In addition, the planned sale of noncore assets is also expected to unlock additional value.

With shares trading at an attractive free cash flow yield and the company holding a leadership position in acreage and operational quality, Viper Energy Inc. (NASDAQ:VNOM) is viewed as deserving a premium valuation relative to peers.

Viper Energy Inc. (NASDAQ:VNOM) is a subsidiary of Diamondback Energy that owns, acquires, and manages mineral and royalty interests in oil and natural gas properties, primarily in the Permian Basin. The company generates revenue by receiving royalties from production on its acreage, without directly bearing drilling or operating costs.

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Disclosure: None. This article is originally published at Insider Monkey.