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Investing.com - Raymond (NSE:RYMD) James has lowered its price target on Viper Energy (NASDAQ:VNOM) to $56.00 from $57.00 while maintaining an Outperform rating on the stock. Currently trading at $37.44, with a market capitalization of $10.8 billion, InvestingPro data shows the company maintains strong financial metrics with a P/E ratio of 9.89.
The firm adjusted its target following Viper’s second-quarter returns of capital, which came in at $0.56 per share, representing approximately 75% of distributable cash flow but falling about 7% below Raymond James and Street expectations of $0.60 per share. Despite this, the company maintains an attractive dividend yield of 6.6%, according to InvestingPro data, which offers extensive analysis through its comprehensive Pro Research Report.
Viper Energy expects to close its acquisition of Sitio Royalties (STR) shortly after August 18, and has updated its standalone fiscal year 2025 guidance to reflect approximately 4% higher production of 76.5-81.5 Mboe/d compared to its previous guidance of 74.5-79 Mboe/d, while maintaining its oil production guidance.
The company has reiterated its pro-forma guidance from June, projecting 122-130 Mboe/d production for the remainder of the year following the STR acquisition closure, and expects fiscal year 2026 production to increase by a mid-single digit percentage from its fiscal year 2025 pro-forma levels.
Raymond James forecasts Viper’s fiscal year 2025 distribution at $2.56 per unit, roughly in line with Street estimates, while its fiscal year 2026 distribution projection of $3.06 per unit stands approximately 4% above Street expectations, with the price target reduction attributed to a weaker commodity strip. InvestingPro analysis indicates strong fundamentals with expected sales growth and a favorable revenue growth forecast of 71% for FY2025, suggesting potential upside despite current market conditions.
In other recent news, Viper Energy reported stronger-than-expected financial results for the second quarter of 2025. The company achieved an earnings per share (EPS) of $0.41, surpassing the forecasted $0.36 by 13.89%. Additionally, Viper Energy’s revenue reached $297 million, exceeding the anticipated $287.21 million. These results highlight the company’s robust performance during this period. Despite the positive earnings and revenue figures, Viper Energy’s stock experienced a slight decline in premarket trading. The company’s stock fell by 0.67% to $37.25. Investors and analysts may find these developments noteworthy as they assess Viper Energy’s financial health and future prospects.
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