TD Cowen has adjusted its valuation on Viper Energy, increasing the price target to $55 from $54 while maintaining a Buy recommendation on the shares. At the time of the analyst note, the stock was trading at $44.96, leaving implied upside of about 22% to the updated target.
The research team projects roughly 5% year-over-year organic oil growth for Viper Energy, a forecast the firm attributes in part to Diamondback’s operating activity in the Permian Basin. TD Cowen also highlights a free cash flow profile that implies a 9% free cash flow yield for 2026.
Market momentum has been favorable in recent months: the shares are up 17% over the past six months and remain close to their 52-week high of $48.41.
Royalty interests and the market view
In its note, TD Cowen draws attention to an anticipated increase in royalty interest volume from newly drilled Diamondback wells in 2026 relative to 2025. The firm frames this as a potential source of incremental value that the broader market may not be fully pricing.
Dividends, buybacks and capital returns
The analyst projects that Viper Energy will deliver a combined 6% dividend yield in 2026, composed of a 3% base dividend plus a 3% variable dividend. For context, the company’s current dividend yield is reported at 2.22%.
TD Cowen further expects the company to repurchase up to 3% of its shares outstanding in 2026, a repurchase program the firm includes as part of its shareholder-return assumptions.
Corporate restructuring and unit repurchase
Viper Energy has completed an internal reorganization and entered into new agreements, according to a filing with the Securities and Exchange Commission. The reorganization converted each limited liability company interest of Viper Energy Partners LLC into an equivalent interest in a newly formed subsidiary, VNOM Holding Company LLC.
The restructuring was executed through an Omnibus Transaction Agreement that included mergers bringing entities such as Sitio Permian, LP, and Sitio Appalachia, LP into Viper Energy Partners LLC. These steps were presented as part of a broader set of corporate structuring initiatives.
Separately, Viper Energy announced an agreement to repurchase 1,000,000 OpCo Units from an affiliate of Kimmeridge Energy Management Company, LLC for $40.65 million. The repurchase values each OpCo Unit at $40.65, consistent with the last closing price of Viper’s Class A Common Stock on Nasdaq. In connection with this transaction, a corresponding number of shares of Viper’s Class B Common Stock owned by Kimmeridge will be canceled.
Company filings described these moves as components of ongoing strategic initiatives and corporate restructuring efforts.
Investment context
The combination of the modestly higher price target, the projected organic production growth tied to Permian activity, a material free cash flow yield for 2026, and expectations for dividends and limited buybacks form the basis for TD Cowen’s Buy stance. The firm singles out the potential increase in royalty interests from new Diamondback wells as an element it believes could be underappreciated by the market.
Investors weighing Viper Energy should consider the company’s evolving capital-return profile and the implications of the corporate reorganization and unit repurchase announced in the SEC filing.