UPDATE: Wunderlich Securities Reiterates On Viper Energy Partners LP On Compelling Valuation

In a report published Monday, Wunderlich Securities analyst Abhishek Sinha reiterated a Buy rating on Viper Energy Partners LP VNOM, but lowered the price target from $41.00 to $37.00. In the report, Wunderlich Securities noted, “In our view, the selling of Viper Energy Partners (VNOM) is simply overdone and now presents a compelling valuation. The stock has been harshly punished for not having any hedge protection against commodity price fluctuations. We believe a 10% change in oil price should impact its DCF by 10%, but VNOM stocks are down 32% since its peak in June while WTI is down just 15% over the same period. Although we are raising the discount rate to capture the increased perceived risk in the commodity price and basin differentials, which lowers our price target from $41 to $37, at the current stock price, VNOM has over 60% total return potential and offers a very attractive risk reward opportunity for investors, in our view. We maintain our Buy rating.” Viper Energy Partners LP closed on Friday at $24.17.