As of June 8, 2025, Black Stone Minerals LP has a Discounted Cash Flow (DCF) derived fair value of $16.95 per share. With the current market price at $13.67, this represents a potential upside of 24.0%.
| Key Metrics | Value |
|---|---|
| DCF Fair Value (5-year) | $16.41 |
| DCF Fair Value (10-year) | $16.95 |
| Potential Upside (5-year) | 20.1% |
| Potential Upside (10-year) | 24.0% |
| Discount Rate (WACC) | 7.4% - 10.4% |
Revenue is projected to grow from $434 million in 12-2024 to $664 million by 12-2034, representing a compound annual growth rate of approximately 4.3%.
| Fiscal Year | Revenue (USD millions) | Growth |
|---|---|---|
| 12-2024 | 434 | 27% |
| 12-2025 | 482 | 11% |
| 12-2026 | 515 | 7% |
| 12-2027 | 546 | 6% |
| 12-2028 | 557 | 2% |
| 12-2029 | 568 | 2% |
| 12-2030 | 601 | 6% |
| 12-2031 | 625 | 4% |
| 12-2032 | 638 | 2% |
| 12-2033 | 651 | 2% |
| 12-2034 | 664 | 2% |
Net profit margin is expected to improve from 63% in 12-2024 to 46% by 12-2034, driven by operational efficiency and economies of scale.
| Fiscal Year | Net Profit (USD millions) | Profit Margin |
|---|---|---|
| 12-2024 | 271 | 63% |
| 12-2025 | 220 | 46% |
| 12-2026 | 235 | 46% |
| 12-2027 | 249 | 46% |
| 12-2028 | 254 | 46% |
| 12-2029 | 259 | 46% |
| 12-2030 | 275 | 46% |
| 12-2031 | 286 | 46% |
| 12-2032 | 291 | 46% |
| 12-2033 | 297 | 46% |
| 12-2034 | 303 | 46% |
with a 5-year average of $33 million. Projected CapEx is expected to maintain at approximately 7% of revenue.
Depreciation is based on an average useful life of 5 years for capital assets.
| Fiscal Year | D&A (USD millions) |
|---|---|
| 12-2025 | 40 |
| 12-2026 | 44 |
| 12-2027 | 50 |
| 12-2028 | 54 |
| 12-2029 | 40 |
| 12-2030 | 42 |
Net working capital is expected to increase gradually, with projected changes affecting free cash flow.
| Components | Average Days |
|---|---|
| Days Receivables | 58 |
| Days Inventory | 0 |
| Days Payables | 34 |
| Fiscal Year | EBITDA | Tax | CapEx | Change in NWC | FCF |
|---|---|---|---|---|---|
| 9M/2025 | 257 | 61 | 27 | 7 | 162 |
| 2026 | 369 | 87 | 38 | (1) | 244 |
| 2027 | 393 | 92 | 41 | 7 | 253 |
| 2028 | 405 | 94 | 41 | 2 | 267 |
| 2029 | 397 | 96 | 42 | 0 | 258 |
| Valuation Method | Fair Price (USD) | Potential Upside |
|---|---|---|
| 5-Year DCF (Growth) | 16.41 | 20.1% |
| 10-Year DCF (Growth) | 16.95 | 24.0% |
| 5-Year DCF (EBITDA) | 10.25 | -25.0% |
| 10-Year DCF (EBITDA) | 12.40 | -9.3% |
Is Black Stone Minerals LP (BSM) a buy or a sell? Black Stone Minerals LP is definitely a buy. Based on our DCF analysis, Black Stone Minerals LP (BSM) appears to be moderately undervalued with upside potential of 24.0%. The company's strong projected growth in revenue and profitability, coupled with consistent capital expenditure, supports our positive outlook on its intrinsic value.
Key investment drivers include:
Investors should consider a buy at the current market price of $13.67.