Black Stone Minerals, L.P. Common units representing limited partner interests (BSM) Company Bio
Black Stone Minerals LP owns oil and natural gas mineral interests in the United States. The company was founded in 1876 and is based in Houston, Texas.
BSM Price Forecast Based on DCF Valuation
DCF Fair Value Target:
Below please find a table outlining a discounted cash flow forecast for BSM, in which we model out valuation assuming a variety of terminal growth rates. To summarize, we found that Black Stone Minerals LP ranked in the 72th percentile in terms of potential gain offered. More precisely, our analysis suggests the stock is undervalued by approximately 237.33% on a DCF basis. As for the metrics that stood out in our discounted cash flow analysis of Black Stone Minerals LP, consider:
Black Stone Minerals LP's weighted average cost of capital (WACC) is 7%; for context, that number is higher than just 22.24% of tickers in our DCF set.
Black Stone Minerals LP's effective tax rate, as measured by taxes paid relative to net income, is at 0 -- greater than only 0% of US stocks with positive free cash flow.
The company's cost of debt, derived from its interest coverage, tax rate, and market capitalization, is greater than only 0% of stocks in its sector (Energy).
Terminal Growth Rate in Free Cash Flow
Return Relative to Current Share Price
FRO, EOG, TTI, CRC, and NR can be thought of as valuation peers to BSM, in the sense that they are in the Energy sector and have a similar price forecast based on DCF valuation.
Here at Zacks, our focus is on the proven Zacks Rank system, which emphasizes earnings estimates and estimate revisions to find great stocks. Nevertheless, we are always paying attention to the latest value, growth, and momentum trends to underscore strong picks.
Thank you for joining us either by phone or online for the Black Stone Minerals' first quarter 2020 earnings conference call. Today's call is being recorded and will be available on our website along with the earnings release, which was issued yesterday evening. Before we start, I'd like to advise you that we will be making forward-looking statements during this call about our plans, expectations and assumptions regarding future performance.
Black Stone Minerals, L.P. (NYSE: BSM) ("Black Stone Minerals," "Black Stone," or "the Company") today announced that it has entered into a development agreement with affiliates of Aethon Energy ("Aethon") with respect to the Company’s undeveloped Shelby Trough Haynesville and Bossier shale acreage in Angelina County, Texas. The agreement provides for minimum well commitments by Aethon in exchange for reduced royalty rates and exclusive access to Black Stone’s mineral and leasehold acreage in the contract area. The agreement calls for a minimum of four wells to be drilled in the initial program year, which begins in the third quarter of 2020, increasing to a minimum of 15 wells per year beginning with the third program year.