Analyst Roger Read of Wells Fargo maintained a Buy rating on LandBridge Company LLC Class A (LB – Research Report), retaining the price target of $93.00.
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Roger Read has given his Buy rating due to a combination of factors that highlight LandBridge Company LLC’s unique growth potential and low-capital-intensive business model. The company’s ability to generate high free cash flow (FCF) from its surface and subsurface assets is seen as underappreciated, and its valuation is likened to that of an Industrial REIT, which trades at multiples of adjusted funds from operations (AFFO). This approach underscores the company’s potential for significant growth, supported by both current and long-term valuation models that align with a price target of $93.
Furthermore, LandBridge’s strategic positioning in the Permian Basin offers a competitive advantage in water disposal, a growing need as shale oil production increases. The company’s substantial land holdings also present opportunities in the burgeoning datacenter and renewable energy sectors, driven by rising demand for AI and sustainable power solutions. These factors collectively support the Buy rating, reflecting confidence in the company’s ability to capitalize on its unique assets and market conditions.
LB’s price has also changed slightly for the past six months – from $63.700 to $67.530, which is a 6.01% increase.