Analysts have slightly trimmed their average fair value estimate for Viper Energy by $0.35 to $51.88. This adjustment is based on updated commodity price assumptions and prevailing expectations for gas and NGL realizations.

Analyst Commentary

Recent Street research reflects a mix of optimism and caution regarding Viper Energy's outlook. While several analysts made modest downward adjustments to price targets, the overall narrative highlights both resilience and near-term challenges as factors that could influence the company’s valuation and growth trajectory.

• Bullish analysts continue to emphasize Viper Energy’s status as the largest public minerals company, supported by high-quality inventory and strong operational partnerships. This foundation supports long-term value creation.
• Viper’s robust margins and disciplined cost structure are expected to drive meaningful shareholder returns, including attractive payouts. These elements provide support to the equity story even when commodity prices fluctuate.
• Despite broader commodity market weakness, energy equities such as Viper have remained resilient. Valuations have held up due to relatively steady oil price assumptions and higher adjusted crack spreads.
• Some analysts see the potential for shares to trade at a premium. This view is based on Viper’s leadership in net acreage, market cap, and operational quality, which could result in significant upside from current levels.

• Bearish analysts are cautious due to weaker gas and NGL realizations, which are expected to pressure cash flow and could result in operational updates that lag consensus expectations.
• There is concern that large-scale share registrations for resale, representing a significant percentage of outstanding shares, could act as a near-term overhang on the stock and depress sentiment compared to peers.
• Price target reductions across the board are linked to updated commodity assumptions, including lower natural gas forecasts. These revised expectations recalibrate growth projections and weigh on valuation multiples.
• The removal of Viper Energy from certain key stock lists signals a more neutral stance among some major brokerages. This change suggests less conviction in immediate outperformance.

What's in the News

• Viper Energy is reportedly considering the sale of non-Permian assets acquired in the $4.1 billion Sitio Royalties takeover (Bloomberg).
• The company issued revised production guidance for the third quarter of 2025 and now expects oil production of 54.5 to 57.5 MBO/d and net production of 104.0 to 110.0 MBOE/d.
• On August 19, 2025, Viper Energy amended and restated its certificate of incorporation and bylaws in full.
• The Board of Directors declared a base cash dividend of $0.33 and a variable cash dividend of $0.20 per Class A common share for the second quarter of 2025. Both are payable on August 21, 2025.

Valuation Changes

• Fair Value Estimate: Decreased marginally from $52.24 to $51.88 per share, reflecting updated price assumptions.
• Discount Rate: Remained unchanged at 6.78%, indicating consistent expectations around risk and return.
• Revenue Growth: Slightly lowered from 34.87% to 34.44%, which signals a modestly tempered growth outlook.
• Net Profit Margin: Essentially stable, with an insignificant decrease from 12.61% to 12.61%.
• Future P/E: Increased slightly from 35.29x to 35.38x, which reflects market expectations of future earnings.