GET DAILY SIGNALSBlack Stone Minerals (BSM) Q3 2026: Derivative Losses Mask Strong Underlying Performance
Key Takeaways
- Black Stone Minerals, L.P. reported third quarter 2026 total revenue of $99.7 million, down 24.7% year over year, largely reflecting a $30.2 million net loss on commodity derivatives.
- Revenue from contracts with customers rose to $129.9 million, up from $105.2 million in the same period a year earlier.
- Net income attributable to limited partners per common unit came in at $0.21, below the consensus estimate of roughly $0.26.
- Adjusted EBITDA reached $104.1 million, ahead of the roughly $84.4 million consensus and up from $91.3 million in the prior quarter.
- Distributable cash flow of $93.0 million supported a $0.35 per-unit distribution, a 9% sequential increase, at approximately 1.25x coverage.
Why This Earnings Report Matters
Black Stone Minerals is one of the largest owners of oil and natural gas mineral interests in the United States, holding royalty interests across 41 states. Because its business model relies on non-cost-bearing mineral and royalty interests, investors watch this quarterly report closely for evidence that royalty volumes, realized commodity prices, and development activity are translating into distributable cash flow. The third quarter of 2026 follows a run of strong results and rising distributions, making this report a key test of whether the partnership can sustain payout growth as commodity markets shift. Results also shed light on the progress of Black Stone's Shelby Trough development agreements, which are central to its long-term production outlook. I also checked this using Tickeron’s AI Screener to see how the stock compares to others in the industry.
The Quarter's Numbers in Detail
For the third quarter of 2026, Black Stone Minerals reported total revenue of $99.7 million, a 24.7% decline from $132.5 million in the year-ago period. The decline was driven by a $30.2 million net loss on commodity derivative instruments, compared with a $27.3 million gain a year earlier. Excluding derivatives, revenue from contracts with customers increased to $129.9 million from $105.2 million, reflecting higher oil and natural gas liquids sales.
Net income attributable to limited partners per common unit was $0.21 on a basic basis, down from $0.40 a year earlier and below the consensus estimate of approximately $0.26. Total revenue also came in below the roughly $114 million analysts had expected. However, Adjusted EBITDA of $104.1 million exceeded the consensus estimate of about $84.4 million and rose from $91.3 million in the second quarter. Distributable cash flow reached $93.0 million, up from $80.4 million in the prior quarter, supporting a $0.35 per-unit distribution.
How the Market Responded
Shares of BSM were little changed immediately following the release, holding near $14.77 in early trading after the report. The mixed print presented investors with competing signals: headline revenue and per-unit earnings missed consensus, weighed down by a non-cash derivative loss, while Adjusted EBITDA and distributable cash flow exceeded expectations and supported a larger distribution. For a royalty-focused partnership, many investors prioritize distributable cash flow and distribution coverage over GAAP net income, which helps explain the relatively muted initial reaction. Sentiment remains supported by the ninth consecutive quarter of improving distributions and a constructive commodity price environment.
Looking Ahead: What to Watch
Looking ahead, investors should monitor the pace of development across Black Stone's Shelby Trough agreements. The partnership expanded its Caturus development agreement in October 2026, adding 730,000 gross acres to reach a total of 950,000 gross acres, with incremental drilling commitments phased over multiple years. In the Permian Basin, the Blue Arrow Operating program is expected to bring additional wells online through the fourth quarter of 2026 and the first half of 2027.
Commodity prices and hedging remain central to the outlook. Black Stone has derivative contracts covering portions of its anticipated oil and natural gas production for 2026, 2027, and 2028, which provide a degree of cash-flow stability but can create non-cash swings in reported results. Acquisition activity is another key variable: the partnership completed $335.5 million of mineral and royalty acquisitions from September 2023 through October 2026 and has signaled it will continue targeted deals.
Finally, unitholders will watch distribution coverage, which stood at approximately 1.25x for the quarter, as well as borrowing-base redeterminations. The borrowing base was reaffirmed at $580.0 million in late October, providing financial flexibility as the partnership balances payout growth with development commitments. From what I see, these factors will shape how the story unfolds in coming quarters.
Exploring AI-Powered Research Tools
In my own research process, I often turn to Tickeron’s AI Screener for quick scans across energy names like BSM. It helps surface comparable royalty plays and technical setups without hours of manual work, which keeps my analysis efficient when evaluating quarterly updates and sector trends.
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Contributor
Sergey Savastiouk, Ph.D. has a degree in Applied Mathematics from Moscow University and has extensive experience as an entrepreneur, investor, manager, and mathematician. His professional expertise is in applied mathematics, mathematical modeling, system and pattern analysis, and software and hardware system integration. He has served as the CEO of several hi-tech start-up companies and nonprofit organizations, which has given him proven capabilities in business strategy for high-tech start-up companies, market assessment, company formation, team building, product development, marketing, and sales. He has published numerous articles in journals and magazines on related fields. As a retail investor, he spent 15 years developing his proprietary trading and quantitative algorithms (now Tickeron’s A.I.), which brought him significant returns in trading the stock market. His current work and goal in founding Tickeron is to bring professional, sophisticated stock market analysis capabilities to retail investors via an easy-to-use interface.
BSM in upward trend: price rose above 50-day moving average on October 23, 2026
BSM moved above its 50-day moving average on October 23, 2026 date and that indicates a change from a downward trend to an upward trend. In 29 of 44 similar past instances, the stock price increased further within the following month. The odds of a continued upward trend are 66%.
Technical Analysis (Indicators)
Bullish Trend Analysis
The Stochastic Oscillator suggests the stock price trend may be in a reversal from a downward trend to an upward trend. 29 of 52 cases where BSM's Stochastic Oscillator exited the oversold zone resulted in an increase in price. Tickeron's analysis proposes that the odds of a continued upward trend are 56%.
The Moving Average Convergence Divergence (MACD) for BSM just turned positive on October 23, 2026. Looking at past instances where BSM's MACD turned positive, the stock continued to rise in 22 of 53 cases over the following month. The odds of a continued upward trend are 42%.
The 10-day moving average for BSM crossed bullishly above the 50-day moving average on October 14, 2026. This indicates that the trend has shifted higher and could be considered a buy signal. In 5 of 12 past instances when the 10-day crossed above the 50-day, the stock continued to move higher over the following month. The odds of a continued upward trend are 42%.
Following a +2.60% 3-day Advance, the price is estimated to grow further. Considering data from situations where BSM advanced for three days, in 194 of 374 cases, the price rose further within the following month. The odds of a continued upward trend are 52%.
BSM may jump back above the lower band and head toward the middle band. Traders may consider buying the stock or exploring call options.
Bearish Trend Analysis
The Momentum Indicator moved below the 0 level on October 30, 2026. You may want to consider selling the stock, shorting the stock, or exploring put options on BSM as a result. In 36 of 87 cases where the Momentum Indicator fell below 0, the stock fell further within the subsequent month. The odds of a continued downward trend are 41%.
Following a 3-day decline, the stock is projected to fall further. Considering past instances where BSM declined for three days, the price rose further in 50 of 62 cases within the following month. The odds of a continued downward trend are 46%.
Fundamental Analysis (Ratings)
The Tickeron Profit vs. Risk Rating rating for this company is 17 (best 1 - 100 worst), indicating low risk on high returns. The average Profit vs. Risk Rating rating for the industry is 71, placing this stock better than average.
The Tickeron PE Growth Rating for this company is 33 (best 1 - 100 worst), pointing to outstanding earnings growth. The PE Growth rating is based on a comparative analysis of stock PE ratio increase over the last 12 months compared against S&P 500 index constituents.
The Tickeron Valuation Rating of 38 (best 1 - 100 worst) indicates that the company is fair valued in the industry. This rating compares market capitalization estimated by our proprietary formula with the current market capitalization. This rating is based on the following metrics, as compared to industry averages: P/B Ratio (2.837) is normal, around the industry mean (3.876). P/E Ratio (12.375) is within average values for comparable stocks, (4.118). Projected Growth (PEG Ratio) (1.339) is also within normal values, averaging (1.958). Dividend Yield (0.086) settles around the average of (0.045) among similar stocks. P/S Ratio (7.022) is also within normal values, averaging (5.980).
The Tickeron SMR rating for this company is 43 (best 1 - 100 worst), indicating strong sales and a profitable business model. SMR (Sales, Margin, Return on Equity) rating is based on comparative analysis of weighted Sales, Income Margin and Return on Equity values compared against S&P 500 index constituents. The weighted SMR value is a proprietary formula developed by Tickeron and represents an overall profitability measure for a stock.
The Tickeron Price Growth Rating for this company is 46 (best 1 - 100 worst), indicating fairly steady price growth. BSM’s price grows at a lower rate over the last 12 months as compared to S&P 500 index constituents.
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General Information
a company which engages in the acquisitions of mineral and royalty interests
Industry OilGasProduction