Viper Energy enters the final days of May with a curious disconnect: the stock fell 6.5% over the week to $45.59, yet analysts spent the same period raising price targets. That gap between Street conviction and market price is the dominant tension this week.
The analyst upgrade cycle has been notably one-directional. Mizuho, Barclays, and Raymond James all raised targets in the past 48 hours — none cut ratings. Barclays lifted to $60 and Raymond James to $61, both maintaining positive ratings. The consensus mean target now runs at $57.94, implying roughly 27% upside from current levels. Wells Fargo, also holding Overweight, lifted to $61 earlier this month. Every recent action on record has been a raise, not a cut — the Street is leaning in harder even as the stock moves in the opposite direction. The bull case centers on Viper's royalty model: low operational costs, high margins, and Permian Basin exposure without the drilling capex burden of traditional E&P. Bears point to commodity price volatility and the knock-on effect of any production disruptions in West Texas.
Positioning in the lending market tells a straightforward story: this is not a short-seller's battleground. Short interest has actually unwound sharply over the past month, down 22% in shares short to roughly 4.6% of the free float. The five-week chart shows a clear de-escalation — shorts peaked at close to 10 million shares in mid-April and have now fallen to 7.7 million. Borrow costs are minimal at 0.30% APR, and availability is extraordinarily loose at over 3,200% of short interest, meaning the lending pool dwarfs current borrowing demand by a vast margin. The ORTEX short score of 36 — down from above 40 earlier in the month — reflects that pressure from the short side has genuinely eased. Options positioning corroborates this: the put/call ratio of 0.34 is essentially flat with its 20-day average of 0.34, producing a z-score near zero. There is no notable hedging activity or directional options skew to speak of.
Valuation multiples have compressed alongside the price. The P/E has pulled back by 1.7 turns over the week to 18x, and EV/EBITDA has drifted lower to 8.3x on a 30-day basis. Those are not alarming levels for a Permian royalty franchise. Factor scores paint a mixed picture: the 12-month forward EPS growth rank is in the 90th percentile, and the dividend score ranks 93rd — the royalty pass-through structure keeps income metrics strong. EPS momentum over 90 days scores at the 84th percentile. The weaker readings are in value and analyst recommendation differentiation, where scores sit in the low-to-mid single digits to low twenties — suggesting the market has already priced in much of the growth story.
The institutional holder base shows active movement. Capital Research added 11.3 million shares in Q1 to become the largest holder at 13% of shares. BlackRock and State Street both added in the most recent period. Invesco moved most aggressively in percentage terms, adding 2.4 million shares to build a 1.3% stake. On the insider side, the dominant transaction was Diamondback Energy — Viper's parent and controlling shareholder — selling roughly 12.9 million shares in early March at $45.69, a $566 million disposal. That overhang has been a known factor since March; with that block now placed, it no longer represents fresh selling pressure. Smaller executive sales in February were routine in scale.
The next earnings event is scheduled for July 27. The most recent print, on May 5, produced an immediate 6.4% decline followed by a 5.6% loss over the subsequent five days — a notably weak two-period reaction. Peers have sold off hard in parallel this week: PR dropped 6.2%, DVN fell 9.1%, and CRGY was off 7.7%, suggesting the pressure on VNOM is sector-wide rather than name-specific.
The key variable heading into summer is how oil prices evolve relative to the targets the Street built its upgrade cycle on — that gap between $45 and $58 will close or widen depending entirely on the commodity backdrop between now and the July print.
See the live data behind this article on ORTEX.
Open VNOM on ORTEX →ORTEX Market Intelligence content is generated by AI from a snapshot of ORTEX's proprietary data. Content is informational only and does not constitute investment advice.
