In a report released yesterday, Noah Hungness from Bank of America Securities maintained a Sell rating on Kimbell Royalty Partners, with a price target of $12.00.
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Noah Hungness has given his Sell rating due to a combination of factors affecting Kimbell Royalty Partners. The company’s production levels have remained stable despite a reduction in the U.S. rig count, but there are concerns about future production risks, especially if oil prices decline further. The current production figures are slightly below expectations, and while there is some short-term support from drilled but uncompleted wells, the outlook remains cautious.
Additionally, the distribution per share was in line with Bank of America’s estimates but fell short of broader market expectations. This shortfall was due to lower natural gas realizations, which were only partially offset by higher natural gas liquids realizations and reduced general and administrative expenses. Furthermore, the merger and acquisition landscape poses challenges, as a weaker oil market outlook may lead to difficulties in closing deals at favorable valuations. These factors contribute to the underperformance rating and a price objective lower than the current market price.
Hungness covers the Energy sector, focusing on stocks such as Northern Oil And Gas, Matador Resources, and Permian Resources. According to TipRanks, Hungness has an average return of -0.8% and a 38.00% success rate on recommended stocks.