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Investing.com - William Blair initiated coverage on Viper Energy (NASDAQ:VNOM) with an Outperform rating on Monday. The company, currently valued at $11.2 billion, trades at a P/E ratio of 11.8, according to InvestingPro data.
The investment firm cited Viper Energy’s position as the largest public minerals company with material long-term value potential, highlighting its quality inventory of 95,000 pro forma royalty acres operated primarily by parent company Diamondback Energy. The company maintains exceptional financial health with a current ratio of 6.15, demonstrating strong liquidity.
William Blair noted the company delivers high per-share growth due to strong margins, with production per million shares increasing 50% from 2021 to 2025 and cash margins approaching 90%.
The firm emphasized Viper Energy’s strong shareholder return program, which includes a base dividend with an industry-low breakeven of under $20 per barrel, along with opportunistic stock repurchases and variable dividends, with a minimum 75% shareholder equity payout.
William Blair projected that Viper Energy’s cash distribution to shareholders could increase to a 100% payout as net debt falls to $1.5 billion in the second half of 2026, and suggested the company could potentially complete two to three more acquisitions. Analysts expect revenue growth of 72% for the current fiscal year, with a strong consensus recommendation of 1.27 (Strong Buy).
In other recent news, Viper Energy reported impressive second-quarter 2025 earnings, with earnings per share reaching $0.41, surpassing the forecasted $0.36 by 13.89%. The company’s revenue also exceeded expectations, totaling $297 million compared to the anticipated $287.21 million. Additionally, Viper Energy completed its all-equity merger with Sitio Royalties Corp., with the combined entity now trading under the NASDAQ ticker VNOM. In analyst coverage, Morgan Stanley initiated coverage on Viper Energy with an Overweight rating and set a price target of $46.00. Meanwhile, Raymond James adjusted its price target for Viper Energy to $56.00 from $57.00, maintaining an Outperform rating. The adjustment followed Viper’s second-quarter returns of capital, which were slightly below expectations. These developments mark significant milestones for the company.
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