Viper upgraded to Overweight on accretive drop-down at KeyBanc

KeyBanc analyst Tim Rezvan last night upgraded Viper Energy (VNOM) to Overweight from Sector Weight with a $62 price target. Despite the shares rallying 64% year-to-date, Viper offers an attractive setup ahead of the expected $4B drop-down of mineral interests from Diamondback Energy (FANG) in early 2025, the analyst tells investors in a research note. The firm says its “counterintuitive thesis” is that a stronger equity currency lessens dilution, given that it expects share issuances to be a significant funding component of the deal, primary share issuance and shares transferred to Diamondback. This increases per share accretion, contends KeyBanc.