Viper Energy Partners (VNOM) Valuation Update - Feb 22

[dan_s]

At the time of this post VNOM was trading at $29.65.

Viper is a partnership, but it has elected to be taxed as a C-Corp. So, it is a good choice for an IRA account.

I have updated my forecast/valuation model for Viper and posted it to the EPG website.
My current valuation is $35.00 per unit.
TipRanks: "In the last 3 months, 5 ranked analysts set 12-month price targets for VNOM. The average price target among the analysts is $38.75. The 5 price targets range from $34 to $43."

Key for Viper is the relationship that they have with Diamondback Energy (FANG). It is Diamondback's aggressive drilling program that is fueling Viper's production growth. Plus, Viper is also aggressively buying back units. As the number of outstanding units decline, dividends should go up (all else being equal).

Based on Q4 2022 results, Viper's next dividend will be $0.49/unit, payable March 10. Based on my forecast model, Viper's variable dividends should add up to $2.07 for the year 2023 and $2.56 for 2024. Rising oil prices will have the most impact on Viper's dividends.

[dan_s]

Neal Dingmann at Truist Financial Maintains a Buy rating on Viper Energy Partners, Lowers Price Target to $43