Viper Energy (VNOM) PT Raised to $58 at Evercore ISI

Evercore ISI analyst Stephen Richardson raised the price target on Viper Energy (NASDAQ: VNOM) to $58.00 (from $45.00) while maintaining a Outperform rating.

The analyst comments "Last year VNOM shares significantly outperformed the energy sector and FANG, with VNOM up 65% vs the XLE +5.4% and FANG +12.5%. Relative outperformance was driven by several factors including continued quarterly execution, index adds (Russell 1000 in July) that drove passive flows and followed VNOM’s conversion to full C-Corp status in late 2023. Moreover, the accretive acquisition of Tumbleweed this past September and investor enthusiasm around the upcoming drop down of EER minerals support continued momentum. With this note we’re revisiting the math we outlined this past July, and adding our drop down expectations into our NAV and TP (was excluded prior). The core appeal for the drop remains centered around the prospect of a multi-year pro forma organic production growth outlook and increased scale that helps flatter an already advantaged cost structure, while VNOM remains committed to returning 75% of cash flow to investors. Biggest change since July is VNOM continuing to outperform FANG, creates a wider window to see more accretion for both. Beyond the drop, we expect VNOM to continue to build scale and extending its growth outlook with an equity currency that arguably opens the door to additional inorganic growth opportunities that flatter the organic growth story here. Reiterate Outperform."

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