Viper (VNOM) Price Target Update - Aug 29

[dan_s]

I have updated my forecast/valuation model for Viper Energy (VNOM).
> VNOM was trading at $31.28 when this was posted.
> My current valuation is $39.00 (just $0.50 lower than my last newsletter)

TipRanks' current price target is $37.17. Three analysts updated their price targets this week:
> On 1/24/2024 Piper Sandler rated it a BUY with a price target of $36.00
> On 1/23/2024 Roth MKM rated it a BUY with a price target of $32.00
> On 1/23/2024 JP Morgan rated it a BUY with a price target of $34.00

Of the four minerals companies in our High Yield Income Portfolio (BSM, KRP, STR, VNOM), I believe it has the most share price upside potential.
> It has the most production (~44,000 Boepd) with annual production growth in the mid-teens (19.7% in 2022 and 16.6% in 2023).
> Viper's relationship with Diamondback Energy (FANG) virtually guarantees steady production growth.
> It has the highest percentage of oil production. Approximately 56% crude oil, 21% NGLs and 23% natural gas. < 96% of 2023 revenues were from the sale of liquids.
> Viper's most recent quarterly dividend was $0.57 per share.
> Based on my forecast, Viper's 2024 dividends should total $2.52/share for yield of ~8%.
> In addition to dividends, it is using free cash flow to buy back shares.

Viper converted to a C-Corp. on 11-13-2023, which increases the number of funds that can own it.