Brigham Minerals (MNRL) Update - April 23

Brigham Minerals (MNRL) Update - April 23

Postby dan_s » Fri Apr 23, 2021 1:25 pm

Raymond James rates MNRL a Strong Buy with a price target of $23.00

Thoughts on the Quarter
Expecting in-line 1Q, estimated winter weather impact unchanged: With the winter weather impact estimated at ~5 days, we're modeling
1Q21 production 9.1 Mboe/d (52% oil), in line with consensus. On the minerals acquisition front, we anticipate the company achieved its targeted
run-rate of $20M-$25M in acquisitions. Recall that the company announced in 4Q earnings that it had already closed/was in the progress on $21.6M
worth of transactions in 1Q. With the strip remaining constructive in 1Q21, we anticipate Brigham accelerated its march toward the targeted 75%
long-term payout ratio with a 10% decrease to 80% in 1Q implying a distribution of $0.28/share (consensus: $0.31/share).

Recommendation: We believe Brigham is poised for material growth in the longer term by driving operator interest in its liquids-rich mineral
assets along with the company's robust appetite for acquisitions in key onshore resource plays. We're encouraged by the company's focus on
remaining debt-free, which has enabled it to operate without meaningfully slashing its payout ratio to preserve its balance sheet. The healthy
balance sheet also enabled the company to make a swift return to the A&D market (target acquisition run-rate: $20-$25M/quarter).
As such, we reiterate our Strong Buy rating and reiterate our price target of $23/share after updating estimates.

Valuation: We value MNRL using a net asset value-based approach, which attributes value to legacy PDP, undeveloped upside
potential, and modeled acquisitions. Our $23/share price target is determined by the PV of forecast distributions.
Dan Steffens
Energy Prospectus Group
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