Crispr Therapeutics shares tumble after significant earnings miss
On Wednesday, Evercore ISI analysts raised the price target for Viper Energy stock (NASDAQ: NASDAQ:VNOM) to $51 from $49, while maintaining an Outperform rating. Currently trading at $41.43 with a market capitalization of $11.95 billion, the company maintains a modest P/E ratio of 10.8x. The analysts cited Viper Energy’s recent acquisition of Sitio Royalties (STR), valued at $4.1 billion, as a significant factor in their decision. According to InvestingPro, the company shows strong fundamentals with a "Good" Financial Health score.
The acquisition is expected to enhance Viper Energy’s scale and lower its dividend breakeven to below $20 per barrel. The deal is also projected to increase production per share by 10%. With an impressive current ratio of 8.7x and operating with moderate debt levels, Viper Energy appears well-positioned to execute this strategic move. According to Evercore ISI, the transaction solidifies Viper Energy’s position as a prominent mineral consolidator in the Permian Basin.
In conjunction with the acquisition, Viper Energy announced a $1.5 billion debt target, which the company aims to achieve organically by the end of 2026 with oil prices between $55 and $60. The company also plans to support its stock through opportunistic share buybacks and continued de-leveraging.
The analysts acknowledged investor concerns about the potential dilution of Viper Energy’s unique sponsorship dynamic with FANG due to the transaction and possible future deals. However, they emphasized that the focus remains on the Permian Basin, providing Viper Energy with a broader opportunity set to work with.
Overall, the analysts reiterated their Outperform rating on Viper Energy stock and highlighted the potential benefits of the acquisition in strengthening the company’s position in the industry. With a strong return on equity of 21% and a 100% gross profit margin, the company demonstrates robust operational efficiency. For deeper insights into Viper Energy’s valuation and growth prospects, including additional ProTips and comprehensive financial analysis, check out the detailed research report available on InvestingPro.
In other recent news, Viper Energy has made headlines with its acquisition of Sitio Royalties, valued at approximately $4.1 billion. This strategic move is expected to enhance Viper Energy’s scale, reducing its dividend breakeven to below $20 per barrel and increasing production per share by 10%. The acquisition includes Sitio’s net debt and is anticipated to close in the third quarter of 2025. Analysts from Evercore ISI have responded by raising Viper Energy’s stock price target to $51, maintaining an Outperform rating, while Texas Capital Securities reaffirmed a Buy rating with a $49 target. The acquisition is projected to generate over $50 million in synergies, contributing to Viper’s leading position in the minerals sector.
Additionally, Raymond (NSE:RYMD) James has increased its price target for Viper Energy to $54, reflecting confidence in the company’s growth trajectory and operational advancements. This comes after Viper Energy’s expansion of its Permian Basin holdings by 22,847 net royalty acres, a 62% increase. Viper Energy’s management forecasts consistent production growth, with projections aligning with current guidance and Street estimates. Evercore ISI also resumed coverage of Viper Energy with an Outperform rating, emphasizing the company’s ability to maintain its 2025 volume guidance amid reduced activity from its parent company. These developments underscore Viper Energy’s strategic maneuvers and potential for sustained growth in the coming years.
This article was generated with the support of AI and reviewed by an editor. For more information see our T&C.