Goldman Sachs Reinstates LandBridge (LB) at Buy

Goldman Sachs analyst John Mackay reinstates coverage on LandBridge (NYSE: LB) with a Buy rating and a price target of $71.00.

The analyst comments "We reinstate coverage of LandBridge (LB) with a Buy rating. LandBridge is a first-mover as a pure-play in the emerging surface acreage management business in the Permian Basin, serving companies across the energy and industrial value chain - as we outlined in our initial initiation of coverage this past July. We remain constructive on LB given: 1) its acreage is well-positioned to capture still-solid Permian Basin activity; 2) its unique business model with minimal required opex or capex, allowing for high FCF conversion; and 3) material upside opportunities on its acreage, particularly data centers where we expect catalysts in the coming months. The company recently closed (12/20/24) the $245m purchase of 46k acres in Reeves Co, TX (with $25m of committed annual revenue) and related private placement of $350m of equity ($150m of which was effectively a secondary sale). This deal, solid 3Q24 performance, and an improving line of sight on upside opportunities drive our EBITDA and FCF estimates 20-25% higher for 2025-28. Our $71 price target is based on a 30x multiple on our 2026 EBITDA estimate; this compares to its closest peer Texas Pacific (TPL) trading at ~44x annualized YTD EBITDA reported by the company."

For an analyst ratings summary and ratings history on LandBridge click here. For more ratings news on LandBridge click here.

Shares of LandBridge closed at $64.60 yesterday.

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