Goldman Sachs Sets $54 Price Target on Viper Energy with 10% FCF Yield
Goldman Sachs named Viper Energy a Strong Buy with a $54 price target, citing its no-capex royalty model and a 10% free cash flow yield at $70/bbl Brent. VNOM plans to sell non-Permian assets for $670 million in 1Q26, pays $0.58 dividends, and reported adjusted EPS $0.40 with $53M cash.
1. Analyst Upgrade and Price Target
Goldman Sachs analyst Neil Mehta assigned a Buy rating on Viper Energy and set a $54 one-year price target implying 22% upside, highlighting a 10% free cash flow yield at $70/bbl Brent and a low dividend breakeven near $30/bbl WTI.
2. Asset Sale and Permian Focus
Viper Energy agreed to sell its non-Permian assets for $670 million to affiliates of GRP Energy Capital and Warwick Capital Partners, with closing expected in early 1Q26, streamlining the partnership into a pure-play Permian royalty asset portfolio.
3. Dividend and Financial Results
In November, VNOM paid a 33-cent regular dividend plus a 25-cent variable dividend, annualizing $1.32 per share for a 5.2% yield; in 3Q25 the company posted $0.40 adjusted EPS, beating forecasts by $0.01, and ended the quarter with $53 million in cash.
4. Business Model and Diamondback Relationship
As a subsidiary of Diamondback Energy, Viper Energy focuses on acquiring mineral and royalty interests in high-margin Permian acreage and leverages Diamondback’s operating expertise to support at least 75% distribution of available cash to shareholders.