Kimbell Royalty Partners, LP (KRP)

Price$14.88Cached quoteAs of 2026-09-05 06:38 UTC

AI: Undervalued

Price checkA high cash yield and supportive analyst targets suggest the units still trade below reasonable value.

Kimbell Royalty Partners, LP (NYSE: KRP) is not a deep-value stock on earnings alone: market data put its trailing P/E in the high teens. Still, the latest quarterly distribution, if simply annualized, implies a double-digit cash yield, while six analysts in S&P Global data had an average twelve-month target roughly 27% above the recent market level. Those signals support an Undervalued view, but only if cash distributions stay resilient after recent acquisitions and commodity prices do not weaken sharply.

Big pictureRoyalty economics are attractive, but commodity cycles and acquisition financing make cash flows uneven.

Kimbell owns mineral and royalty interests rather than funding most drilling itself, so operators bear the well-development capital while Kimbell receives a share of production revenue. That creates strong cash conversion and limited direct drilling spending, but revenue remains tied to oil, gas and NGL prices and to operator activity. Q2 delivered record revenue, EBITDA and distributable cash, yet the model is still cyclical. Hedges through 2028 soften some price swings, not the underlying long-term commodity exposure.

Business strengthRecord cash generation, broad acreage and active drilling support distributions, while leverage remains manageable but meaningful.

Q2 2026 produced $84.9 million of consolidated adjusted EBITDA and $60.0 million of cash available for common-unit distributions; adjusted EBITDA is a profit measure before interest, taxes and certain non-cash items. Net debt was about $433.8 million at June 30, equal to roughly 1.4 times trailing EBITDA, with $181.3 million of undrawn revolver capacity. Management pays 75% of distributable cash and uses 25% to reduce debt, which improves durability, though recent cash-funded acquisitions have raised financing needs.

What could change the storyExecution on acquisitions and commodity prices will decide whether the current discount closes or proves justified.

Bull case: the Mesa and Drop Down assets hit guidance, fourth-quarter production reaches the 27.7-30.7 Mboe/d range, oil and gas prices remain firm, and recurring debt paydown lowers leverage while distributions hold or rise. Bear case: commodity prices fall 20-25%, operators slow drilling, acquired assets underperform, or refinancing costs stay high; then distributable cash and payouts would shrink while leverage feels heavier. Dilution also matters: Kimbell issued roughly 16.4 million OpCo units paired with equal Class B units for the two 2026 acquisitions, partly offset by first-half common-unit repurchases.

AI: News

Production guidance raisedKimbell lifted second-half production expectations after integrating Mesa and the Drop Down royalty assets.

On August 24, Kimbell updated 2026 guidance following the Mesa and Drop Down acquisitions. Q3 production is expected at 26.5-29.5 Mboe/d and Q4 at 27.7-30.7 Mboe/d, with oil at 32%-36% of volumes. Management also expects lower cash G&A per Boe and reaffirmed a 75% payout of distributable cash, with the remaining 25% directed toward revolver debt repayment.

Drop Down acquisition closedKimbell completed a large royalty acquisition using cash plus new operating-company units, expanding assets and dilution.

On August 21, Kimbell closed the approximately $221.2 million Drop Down acquisition. Consideration included about $74.9 million in cash and 9.5 million OpCo units paired with an equal number of Class B units, which can ultimately exchange into common units. The acquired interests span the Eagle Ford, Permian, Mid-Continent and Appalachia. The deal adds production and expected distributable cash, but also increases leverage and common-equivalent unit count, so accretion per unit is the key test.

Record second-quarter resultsSecond-quarter revenue, EBITDA, production and distributable cash reached records, supporting a higher quarterly distribution.

On August 7, Kimbell reported Q2 production of 25,830 Boe/d, oil, gas and NGL revenue of $103.0 million, net income of $47.3 million and consolidated adjusted EBITDA of $84.9 million. Cash available for distribution was about $60.0 million. The board declared a $0.47 quarterly distribution, up 15% from Q1, while earmarking about $17.9 million of retained cash for debt reduction. Revolver commitments also rose to $660 million.

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Financial statements

	2025	2024	2023	2022	2021	2020	2019	2018	2017
Revenue	$333.8M	$309.3M	$267.6M	$282.0M	$175.1M	$90.5M	$108.2M	$70.3M	$30.3M
Operating expenses	$201.0M	$272.3M	$49.2M	$44.8M	—	$341.2M	$259.8M	$118.4M	$27.8M
Operating income	$132.8M	$37.0M	$109.9M	$136.9M	$49.3M	−$250.7M	−$151.6M	−$48.2M	$2.5M
Operating margin	39.79%	11.96%	41.06%	48.56%	28.16%	−277.11%	−140.06%	−68.56%	8.26%
EBITDA	$257.4M	$172.1M	$206.4M	$187.0M	$86.1M	−$202.7M	−$99.5M	−$23.0M	$18.1M
EBITDA margin	77.10%	55.65%	77.12%	66.32%	49.18%	−224.07%	−91.90%	−32.67%	59.49%
Net income	$99.7M	$11.1M	$83.0M	$130.8M	$42.4M	−$256.1M	−$158.2M	−$52.3M	$1.7M
Net profit margin	29.85%	3.58%	31.02%	46.39%	24.24%	−283.03%	−146.18%	−74.41%	5.65%
Basic EPSper basic share	$0.62	-$0.12	$0.93	$1.75	—	—	—	—	—
Diluted EPSper diluted share	$0.62	-$0.12	$0.91	$1.72	—	—	—	—	—

Review official source filings ↗

Owners

Reported shareholders

Reference date Jun 30, 2026

Reported holdings Number of shares

View holders

Top 20 reported holders of KRP
Holder	Shares held
VAN ECK ASSOCIATES CORP	3.63M
AMERICAN CENTURY COMPANIES INC	3.38M
MORGAN STANLEY	1.9M
RAYMOND JAMES FINANCIAL INC	1.6M
ALGERT GLOBAL LLC	1.39M
EnCap Investments L.P.	1.31M
VANGUARD PORTFOLIO MANAGEMENT LLC	1.06M
UBS Group AG	977.33K
NOMURA ASSET MANAGEMENT INTERNATIONAL INC.	863.01K
ROYAL BANK OF CANADA	648.03K
PIN OAK INVESTMENT ADVISORS INC	580.3K
MARSHALL WACE, LLP	563.1K
HRT FINANCIAL LP	476.73K
JPMORGAN CHASE & CO	476.01K
WELLS FARGO & COMPANY/MN	472.94K
Freestone Capital Holdings, LLC	462.69K
Oxbow Advisors, LLC	407.99K
Orvieto Partners, L.P.	397.55K
Yaupon Capital Management LP	364.87K
LPL Financial LLC	343.85K

Bars compare reported share counts. A matching total for this share class and reporting period is unavailable, so percentages are not shown.

Source: SEC Form 13F ↗Updated Sep 29, 2026 · Quarterly data

Insider buys & sells

Jul 1, 2024–Jun 30, 2026

Buys0$0.00 disclosed value

Sells (SEC code S)8$1.25M disclosed value

Transaction	Insider	Type	Shares	Price	Value	Owned after
Mar 23, 2026Form 4	Rhynsburger BlayneController	SellCommon units representing limited partner interests	6.6K	$14.48	$95.7K	75.2K
Mar 2, 2026Form 4	Wynne Mitch S.Director	SellCommon units representing limited partner interests	35.0K	$14.48	$506.8K	274.3K
Sep 4, 2025Form 4	Rhynsburger BlayneController	SellCommon units representing limited partner interests	3.6K	$13.74	$49.5K	43.7K
May 28, 2025Form 4	Rhynsburger BlayneController	SellCommon units representing limited partner interests	2.0K	$13.27	$26.5K	47.3K
Mar 18, 2025Form 4	Rhynsburger BlayneController	SellCommon units representing limited partner interests	7.9K	$13.86	$108.8K	49.3K

Review ownership filings at SEC.gov ↗

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Kimbell Royalty Partners, LP (KRP)

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