Black Stone Minerals (BSM) Valuation Update - Aug 2

[dan_s]

At the time of this post BSM was trading at $17.31

I have updated my forecast/valuation model for BSM for Q2 actual results and their fresh production guidance. My forecast is based on the low end of their production guidance because of the falling active rig count in the Haynesville Shale gas play.

My current valuation is lowered by $0.50 to $18.00/unit. < BSM is a Master Limited Partnership (MLP)

Of the four minerals companies in our High Yield Income Portfolio (BSM, KRP, STR, VNOM), it is the most exposed to lower-for-longer natural gas & NGL prices. That said, BSM is expected to hold its quarterly cash distributions at $0.475/unit.
> BSM is debt free and they have over $80 million of cash.
> They have some very good hedges in place for 2H 2023. More than 50% of their natural gas is hedged at $5.15/MMBtu.

TipRanks: "In the last 3 months, 3 ranked analysts set 12-month price targets for BSM. The average price target among the analysts is $17.33."