Sitio Royalties initiated with an Overweight at KeyBanc

KeyBanc analyst Tim Rezvan initiated coverage of Sitio Royalties with an Overweight rating and $36 price target. Following three mid-year acquisitions, and on the cusp of closing the Brigham Minerals acquisition by year-end, Sitio is establishing itself as a large consolidator in the Permian Basin, Rezvan tells investors in a research note. The analyst sees an "open lane for large-scale consolidation that Sitio can continue to deliver for shareholders." The company’s size, float, reduced private equity ownership, "attractive" 8.2% yield and "conservative" 65% payout ratio create an attractive setup for future acquisitions, says Rezvan.