Mizuho starts coverage on Sitio Royalties with 'neutral' rating

Brokerage Mizuho starts coverage on royalty holder Sitio Royalties Corp STR.N with "neutral" rating and $23 PT, a ~15% upside to the stock's last close

Says STR has a "quality portfolio of mineral and royalty interests" mainly in the Permian Basin

Co's key challenge is how its M&A strategy will evolve, with a need to gain "size/scale" to remain competitive - brokerage

STR's recent M&A focus on "modestly sized deals" showcases its strong "ground-game presence" and high acquisition standards, but also indicates a competitive market for larger acquisitions - brokerage

Says co needs to find the right balance between "scale" and "value" in its ongoing M&A efforts to succeed

As of last close, STR up 4.3% YTD