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JP Morgan's Arun Jayaram raised their price target on Viper Energy (NASDAQ: VNOM) by 18.6% from $43 to $51 on 2024/12/05. The analyst maintained their Strong Buy rating on the stock.

In an Energy sector overview note, Jayaram reported that JP Morgan expects natural gas producers to benefit from "three powerful secular demand trends in 2025:"

• The build-out of significant liquefied natural gas export capacity.
• Rising power demand from electrification. And
• Coal-to-gas switching.

Given those trends, the analyst told readers that JPMorgan updated its models for E&P names through 2030 to include its view of long-term gas prices above $3.50 per MMBtu.

Their firm takes that view because it believes prices will need to reset to a higher level to incentivize incremental supply growth from the Haynesville and other higher-cost gas basins, Jayaram detailed.

Regarding oil producers, the analyst said that JP Morgan expects the oil market to shift from balanced conditions in 2024 to surplus in 2025 on supply additions, with the result that it is shifting to a "more defensive stance" in that space.