Title

Earning Preview: Kimbell Royalty Partners LP this quarter’s revenue is expected to increase by 0.78%, and institutional views are cautious

Abstract

Kimbell Royalty Partners LP will release its quarterly results Pre-Market on February 26, 2026, with forecasts pointing to marginal revenue growth and softer adjusted EPS, while investor attention centers on realized pricing, hedging outcomes, and capital return discipline.

Market Forecast

Market tracking indicates Kimbell Royalty Partners LP is expected to report revenue of 78.06 million in US dollars this quarter, up 0.78% year over year, with adjusted EPS estimated at 0.124, down 26.94% year over year, and EBIT of 26.69 million, up 3.10% year over year; margin forecasts have not been disclosed. The main business is expected to hinge on realized commodity pricing and volumes, with a near-flat topline outlook tempering expectations for margin expansion. The most promising segment remains the oil, natural gas and LNG stream, which delivered 76.81 million last quarter; the consolidated forecast for the current quarter signals a slight year-over-year revenue increase of 0.78%.

Last Quarter Review

Kimbell Royalty Partners LP reported revenue of 80.62 million, a gross profit margin of 92.73%, GAAP net profit attributable to the parent company of 19.68 million, a net profit margin of 25.50%, and adjusted EPS of 0.19, with adjusted EPS down 13.64% year over year. A key highlight was EBIT of 28.85 million, which exceeded the prior estimate by 2.30 million, despite a 15.66% year-over-year decline. The core oil, natural gas and LNG stream contributed 76.81 million, representing 95.27% of total revenue, while consolidated revenue decreased 3.78% year over year; quarter on quarter, GAAP net profit fell 25.33%.

Current Quarter Outlook

Main Business

The current quarter setup for Kimbell Royalty Partners LP’s main revenue stream is shaped by realized commodity prices and the timing of operator disbursements across its royalty interests. With the consolidated forecast implying revenue of 78.06 million and EBIT of 26.69 million, guidance points to modest top-line stability but a sharper contraction in adjusted EPS, reflecting potential mix effects, depletion and amortization patterns, and the impact of hedging on net income. Last quarter’s gross profit margin of 92.73% and net profit margin of 25.50% underscore the high-margin nature of royalty inflows, yet earnings per unit can weaken when commodity price curves flatten and non-cash or hedging-related items dilute bottom-line growth. Investors will look for commentary on realized price differentials within the oil, natural gas and LNG stream and whether last quarter’s derivative loss line item moderates, as this could influence net profit conversion and distribution capacity in the near term.

The main business’s operational throughput centers on volumes delivered by third-party operators and the breadth of wells contributing across Kimbell’s diversified mineral and royalty footprint. Even without operating expenses typical of upstream producers, quarter-to-quarter cash flows can shift due to well timing, production declines, operator-level activity patterns, and the pace of newly connected wells entering payout. For the quarter ahead, a near-flat revenue trajectory suggests a balance between stable production volumes and mixed realized pricing, which, paired with lighter adjusted EPS, highlights a prudent approach to evaluating distribution sustainability and any adjustments to payout policy. Monitoring any indication of accelerated completions or tailwinds from newly active areas on Kimbell’s acreage could help explain variance in EBIT versus unit-level earnings.

Most Promising Business

The oil, natural gas and LNG stream remains the largest and most promising business for Kimbell Royalty Partners LP given its 95.27% share of last quarter’s revenue and its direct linkage to realized commodity prices across the partnership’s mineral base. Last quarter, this stream accounted for 76.81 million in revenue in US dollars; the current consolidated forecast indicates slight year-over-year growth at 0.78%, implying the core mix is resilient but not aggressively expanding. The key to unlocking incremental earnings lies in the cadence of new wells connected by operating partners, improved price realizations, and favorable volume trends, all of which can translate into higher EBIT and better coverage for distributions even if EPS lags.

Forward-looking upside is likely tied to a constructive mix of liquids and gas volumes on Kimbell’s platform and the reduction of drag from hedging losses. If the commodity derivative line moderates or reverses, net profit could improve relative to EBIT, reducing the gap implied by the current EPS forecast. The partnership’s royalty-driven structure allows it to scale with operator activity without incurring upstream capex, which can produce highly cash-efficient results in quarters where price and volume align positively. As such, even a modest uptick in realized pricing combined with normalized derivative impacts would support stronger earnings quality than the adjusted EPS estimate currently suggests.

Key Stock Price Drivers This Quarter

Earnings surprise versus the forecasted adjusted EPS of 0.124 and revenue of 78.06 million is likely to be the primary catalyst for Kimbell Royalty Partners LP’s stock reaction around the print. The degree to which EBIT trends align with unit-level earnings will be monitored closely, given that last quarter’s EBIT beat contrasted with a softer adjusted EPS and a quarter-on-quarter net profit decline of 25.33%. Clarity on realized price outcomes, the extent of hedging gains or losses this quarter, and the visibility into near-term distributions will influence how investors recalibrate expectations for cash returns and valuation.

Another driver will be commentary on the pace of new wells and production volumes feeding royalty payments, as well as any signals on geographic mix with stronger liquids exposure. A measured increase in volumes or an improvement in liquids pricing would provide support for revenue resilience even in a mixed pricing backdrop, while diminishing derivative losses would enhance net margin and support more stable EPS. Management’s detail on the timing of operator disbursements and any updates on acquisitions or asset additions can also serve as catalysts, providing insight into organic and inorganic growth paths without materially altering the cost base.

Lastly, investors will weigh distribution coverage and payout consistency against the backdrop of an EPS estimate that implies a notable year-over-year decline. If the partnership demonstrates stable cash generation and maintains or incrementally grows distributions, that would counterbalance EPS pressure and anchor valuation support. Conversely, if hedging or non-cash items again weigh on net profit and unit-level earnings, the shares could reflect caution until clearer momentum in realized pricing or volume-driven uplift emerges in subsequent quarters.

Analyst Opinions

Within the January 1, 2026 to February 19, 2026 window, the collected analyst stance skews cautious-to-bearish, with bearish and cautious views representing the majority compared to bullish calls. Based on the available items, the ratio of bullish versus bearish opinions is 0% bullish to 100% cautious-or-bearish. KeyBanc’s Tim Rezvan maintained a Hold rating on Kimbell Royalty Partners LP during this period, reflecting a restrained stance aligned with the partnership’s forecast of near-flat revenue growth and a sharper year-over-year decline in adjusted EPS.

This cautious majority view connects to the mixed signal in the forecasts: EBIT growth of 3.10% year over year suggests underlying resilience, yet the adjusted EPS estimate of 0.124 reflects the dampening effect of derivative and accounting items on unit-level earnings. The measured topline outlook, with revenue expected at 78.06 million up 0.78% year over year, underscores a “wait-and-see” posture until the partnership demonstrates improved conversion from EBIT to net profit and more visible catalysts in realized commodity pricing or volume additions. Analysts in the cautious camp tend to emphasize near-term sensitivity to pricing curves, hedging results, and the distribution outlook, all of which are vital to investor confidence but do not yet signal a decisive inflection.

In-depth, the majority stance highlights three focal points for evaluation at the print. First, whether last quarter’s derivative loss line stabilizes, thereby reducing the gap between EBIT and adjusted EPS and supporting net profit margins. Second, the extent to which realized price outcomes across the oil, natural gas and LNG stream can yield incremental revenue and cash generation beyond the modest 0.78% year-over-year forecast. Third, clarity on distributions and coverage, which often serves as a key anchor for royalty partnerships and can mitigate EPS volatility if cash flows remain robust. In sum, consensus caution is rooted in the interplay of solid core economics and near-term earnings dilution, with analysts awaiting confirmation of stronger catalysts before shifting to a constructive view.