Q3 Earnings Preview for Brigham Minerals (NYSE:MNRL)

in EARNINGS/INVESTING IDEAS by

Brigham Minerals, Inc. (NYSE:MNRL) is scheduled to report Q3 earnings results after markets close for trading on November 5, 2020.

The company is expected to report earnings of $0.04/share on revenue of $20.786 million. The consensus earnings per share (EPS) of $0.04/share is based on a poll of 7 analysts and represents a decline in eps of −40.1% over the same quarter last year, when the company reported earnings of $0.06/share.

The revenue forecast of $20.786 million based on a poll of 9 analysts implies a year-over-year (YoY) decline in revenue of −17.2%. Last year the company reported $25.107 million in revenue for the quarter.

Expected to report EPS contraction of −40.1% for Q3, 2020
Metric Expected Prior Year YoY Change
Revenue $20.79 $25.11 −17.2%
EPS $0.04 $0.06 −40.1%

Earnings Call Trends

Historically, management has exceeded analyst expectations 2 out of the last 6 tracked quarters, and missed expectations 4 quarters.

What are your expectations from Brigham Minerals, Inc. for earnings this quarter? Let us know in the comments!

Analyst Expected vs. Reported EPS
Quarter Expected Reported Surprise Result
Q2, 2020 -$0.05 -$0.07 -31.4% Missed
Q1, 2020 $0.16 $0.14 −11.4% Missed
Q4, 2019 $0.18 $0.22 18.3% Beat
Q3, 2019 $0.18 $0.06 −66.0% Missed
Q2, 2019 $0.19 $0.10 −48.4% Missed
Q1, 2019 $0.07 $0.08 11.6% Beat

In the following table, we summarize the company’s stock price movements after earnings releases. The “Price Day Prior” column shows the closing stock price on the day before the earnings report, and the “Price Next Day” column shows the stock price at the end of the trading day after the earnings report. After the last earnings report for the period ending June 30, 2020, the stock price reacted by falling −1.9%.

Stock Price Performance After Earnings
Report Date Price Day Prior Price Next Day Change % Result
August 12, 2020 $12.31 $12.07 −1.9% Decline
May 13, 2020 $12.97 $12.62 −2.7% Decline
February 27, 2020 $14.89 $15.95 7.1% Increase
November 7, 2019 $18.31 $19.70 7.6% Increase

The other question to consider is one of earnings manipulation. There is a lot of pressure on management each quarter to deliver on earnings expectations. The Beneish M-Score is a statistical model that provides some insight into whether the company might be manipulating earnings. With a Beneish M-Score of −2.89, the model suggests that the company is not likely to be an earnings manipulator. A value of −2.89 implies a 0.2% chance of earnings manipulation.

Fundamentals And Technical Analysis

Brigham Minerals, Inc. is currently trading at $8.82/share, up 1.3% for the day. The company is trading at approximately 40.7% of its 52-week high of $21.65/share. The company’s stock price is down −26.9% since the last earnings report and down −4.9% over the previous week. The company’s 14 Day Relative Price Index (RSI) of 41.26 suggests the company is trading in technically neutral territory. The RSI is considered overbought when above 70 and oversold when below 30.


NYSE:MNRL Stock Price Chart
Source: Finbox

The current share price implies a price-to-earnings (P/E) multiple of 42.62 and a forward P/E multiple of 44.10.

Brigham Minerals, Inc.’s current share price also implies a price-to-book (P/B) multiple of 0.96. The following table summarizes some other key fundamental ratios:

Data as of November 1, 2020
Metric Value
Last Reported Fiscal Period Key FY2020.Q2
Period End Date June 30, 2020
Stock Price (Current) $8.82
P/E Ratio 42.6x
P/E Ratio (Fwd) 44.1x
PEG Ratio 0.2
Total Debt / Total Capital 0.0%
Levered Free Cash Flow -$89.755 million
EV / EBITDA 4.8x

Finbox

Brigham Minerals, Inc. is a small-cap stock with a market capitalization of $378.4 million and a total enterprise value of $362 million. The company operates in the Energy sector and the Oil, Gas & Consumable Fuels industry.

Brigham Minerals, Inc. owns and operates a portfolio of mineral and royalty interests in the continental United States. The company primarily holds mineral and royalty interests in the Permian Basin in West Texas and New Mexico; the South Central Oklahoma Oil Province and Sooner Trend Anadarko Basin Canadian and Kingfisher Counties plays in the Anadarko Basin of Oklahoma; the Denver-Julesburg Basin in Colorado; and Wyoming and the Williston Basin in North Dakota. As of December 31, 2019, it had mineral and royalty interests in approximately 57,800 net mineral acres; and owned mineral and royalty interests in 4,908 gross productive horizontal wells, which consisted of 4,424 oil wells and 484 natural gas wells, as well as proved undeveloped reserves of 7,037 thousand barrels of oil; 28,498 million cubic feet of natural gas; and 3,344 thousand barrels of natural gas liquids for a total of 15,131 thousand barrels of oil equivalent. Brigham Minerals, Inc. was founded in 2012 and is headquartered in Austin, Texas.

Expertise: financial modeling, mergers & acquisitions. Andy is also a founder at finbox.io, where he’s focused on building tools that make it faster and easier for investors to do investment research. Andy’s background is in investment banking where he led the analysis on over 50 board advisory engagements involving mergers and acquisitions, fairness opinions and solvency opinions. Some of his board advisory highlights: - Sears Holdings Corp.’s $620 mm spin-off via rights offering of Sears Outlet, Hometown Stores and Sears Hardware Stores. - Cerberus Capital Management’s $3.3 bn acquisition of SUPERVALU Inc.’s New Albertsons, Inc. assets. Andy can be reached at andy@finbox.io or at +1 (516) 778-6257.

Leave a Reply

This site uses Akismet to reduce spam. Learn how your comment data is processed.