In a report released yesterday, Noah Hungness from Bank of America Securities reiterated a Sell rating on Kimbell Royalty Partners, with a price target of $12.00.
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Noah Hungness’s rating is based on several key observations regarding Kimbell Royalty Partners’ recent performance and future outlook. The company’s adjusted EBITDA for the quarter was slightly below both consensus and Bank of America’s estimates, primarily due to lower production volumes. This shortfall in production led to a reduced distribution per share, which fell short of expectations.
Additionally, while production saw a slight increase, the decline in the net drilled uncompleted (DUC) backlog and permitted locations suggests a potential slowdown in future production. The decrease in net DUCs, particularly in higher-cost, oil-weighted basins like Eagle Ford and Bakken, reflects weaker oil prices and reduced activity. With rig counts having peaked earlier in the year and now stabilizing, there are concerns about the 2026 production outlook, as declining DUC counts may indicate softness in future production capabilities.
Based on the recent corporate insider activity of 28 insiders, corporate insider sentiment is negative on the stock. This means that over the past quarter there has been an increase of insiders selling their shares of KRP in relation to earlier this year.