Above-Guidance Production Amid Lower Profits: What Does This Reveal About Kimbell Royalty (KRP)'s Core Strengths?

• Kimbell Royalty Partners recently reported its third quarter 2025 results, with revenue of US$80.62 million and net income of US$19.68 million, both reflecting a year-on-year decrease, but with production exceeding guidance at 25,530 Boe per day and a declared distribution of US$0.35 per common unit.
• Despite sector-wide headwinds, Kimbell's operational resilience was evident through organic production growth and a continued focus on returning value to unit holders.
• We'll explore how Kimbell’s above-guidance production growth informs the company’s investment narrative and future earnings outlook.

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Kimbell Royalty Partners Investment Narrative Recap

To be a shareholder in Kimbell Royalty Partners, it helps to have conviction in the long-term need for growing energy supplies and the company’s ability to translate active drilling and disciplined acquisitions into stable cash distributions. The recent Q3 2025 update, featuring production above guidance despite sector challenges, does not materially change the company’s most important short-term catalyst, which remains production growth exceeding organic declines. The biggest risk continues to be the potential for long-term decline in royalty asset production if acquisition and drilling activity cannot keep pace. The Q3 announcement of an above-guidance average daily production of 25,530 Boe per day is a critical indicator for evaluating Kimbell’s core catalyst. This result, combined with strong rig activity on its portfolio and a cash distribution of US$0.35 per unit, reinforces the focus on production growth and capital returns. Investors watching near-term volume results will see this as supporting the company’s overall investment case. However, despite outperforming on production, investors should remain aware that...

Read the full narrative on Kimbell Royalty Partners (it's free!)

Kimbell Royalty Partners is projected to achieve $379.9 million in revenue and $80.8 million in earnings by 2028. This outlook assumes a 6.7% annual revenue growth rate and an $81.3 million increase in earnings from the current level of -$548.7 thousand.

Uncover how Kimbell Royalty Partners' forecasts yield a $17.20 fair value, a 28% upside to its current price.

Exploring Other Perspectives

Simply Wall St Community members assigned fair values ranging from US$4 to US$59.91 per unit, reflecting six distinct outlooks. While production growth stands out as a key focus after the latest report, this wide range of opinions makes it clear you should consider several viewpoints before forming your own outlook.

Explore 6 other fair value estimates on Kimbell Royalty Partners - why the stock might be worth less than half the current price!

Build Your Own Kimbell Royalty Partners Narrative

Disagree with existing narratives? Create your own in under 3 minutes - extraordinary investment returns rarely come from following the herd.

• A great starting point for your Kimbell Royalty Partners research is our analysis highlighting 2 key rewards and 4 important warning signs that could impact your investment decision.
• Our free Kimbell Royalty Partners research report provides a comprehensive fundamental analysis summarized in a single visual - the Snowflake - making it easy to evaluate Kimbell Royalty Partners' overall financial health at a glance.

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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.

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