Viper Energy (VNOM) Update based on merge with STR - June 4

[dan_s]

VNOM closed at $40.14 on June 4.

TipRanks: "In the last 3 months, 13 ranked analysts set 12-month price targets for VNOM. The average price target among the analysts is $53.08."

Only three energy sector analysts have updated their forecasts for TipRanks since the merger with STR was announced.
Here are their updated price targets that are all dated 6-3-2025
> Stephen Richardson at Evercore ISI rates VNOM a Buy with a price target of $51.00
> Derrick Whitfield at Texas Capital Securities rates VNOM a Buy with a price target of $49.00
> Leo Mariani at Roth MKM rates VNOM a Buy with a price target of $52.00

Since VNOM and STR are both in our High Yield Income Portfolio (and I own them both) I have a HIGH level of confidence in my proforma forecast/valuation model for the Post-Merger Company. In Q4 2025, the first quarter of full post-merger results, Viper's production should be ~129,500 Boepd and the 2025 exit rate should be ~131,000 Boepd. My 2026 forecast is based on production of 135,000 Boepd, which I believe is a very conservative estimate. Production mix in Q4 2025 and 2026 should be approximately 52% crude oil, 26% natural gas and 22% NGLs.

My current valuation, based on the merger closing August 1, 2025 is $55/share for VNOM.

My Proforma Forecast for VNOM + STR has been posted to the EPG website.