Sitio Royalties initiated with a Neutral at Mizuho

Mizuho initiated coverage of Sitio Royalties (STR) with a Neutral rating and $22 price target The company has built a quality portfolio of mineral and royalty interests primarily in the Permian Basin, the analyst tells investors in a research note. The firm views the key question for the shares as how Sitio’s acquisition strategy will evolve in a sector where investors are increasingly focused on size and scale. Mizuho says the company will need to find the right balance between scale and value. It sees Sitio’s relative valuation as fair at current levels.