On Monday, KeyBanc Capital Markets adjusted its price target on shares of Kimbell Royalty Partners LP (NYSE:KRP), increasing it to $21 from the previous $20, while maintaining an Overweight rating on the stock.
The firm's analyst cited expectations for a consistent performance following the company's recent acquisitions. Kimbell has confirmed that the production from these acquisitions is aligning with expectations, which contributed to the analyst's positive outlook.
The analyst also highlighted the appealing tax benefits associated with Kimbell Royalty Partners' units. The current next twelve months (NTM) yield stands at an impressive 10.7%. Additionally, the company experienced a significant 93% tax shield on the reduction of cost basis in the last quarter. This tax shield emphasizes the potentially advantageous tax-adjusted yield for investors holding the company's units.
Kimbell Royalty Partners has been actively engaging in acquisitions to expand its portfolio, and the successful integration of these new assets seems to be a key factor in the firm's maintained Overweight rating. The analyst's remarks suggest that the company's strategy is effectively meeting its production targets, which is a positive indicator of its operational performance.
The firm's commentary underscores the unique financial characteristics that differentiate Kimbell Royalty Partners in the market.
InvestingPro Insights
Kimbell Royalty Partners' commitment to shareholder returns is evident in its management's aggressive share buyback strategy and the substantial dividend yield, which stands at 10.69% as of the latest data. This is in line with KeyBanc Capital Markets' positive assessment of the company's consistent performance and tax advantages. The high gross profit margin of 92.56% over the last twelve months further corroborates the company's operational efficiency, a key factor that may have influenced KeyBanc's increased price target.
Investors considering Kimbell Royalty Partners should note the company's robust financials, including a market capitalization of approximately $1.19 billion and a price-to-earnings (P/E) ratio of 17.35, which adjusts to a slightly more favorable 16.13 when considering the last twelve months as of Q4 2023. With analysts predicting profitability this year and a history of maintaining dividend payments for eight consecutive years, the company presents a compelling case for those seeking stable income-generating investments. For more detailed analysis and additional InvestingPro Tips, visit https://www.investing.com/pro/KRP, and remember to use coupon code PRONEWS24 to get an extra 10% off a yearly or biyearly Pro and Pro+ subscription. There are 14 additional InvestingPro Tips available for Kimbell Royalty Partners that could further inform investment decisions.
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