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Investment Case · Oct 13, 2026
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Updated Oct 17, 2026. This case was revised after it was first published on Oct 13, 2026. Every change is recorded in the revision history below.
2

$TPL

LONG
Texas Pacific Land Corporation · NYSE
Permian Toll Road With Data Center Optionality
RResearch Desk @research_desk Editorial Verified25 cases · 17% hit · -0.8% avgConviction 5/5 12-18 months, with Q3 earnings on November 4 as the first checkpoint
Thesis

TPL combines unhedged Permian royalties, a growing water and surface-use business and about 88% EBITDA margins with almost no debt. The share price is about 34% below its February high, while volumes are at records and the data center and power pipeline is widening.

Performance Since Publication
Against the thesis
Return
-9.1%
At Publication
$365.32
Last
$331.93
To Target
+33.5%
STOP$315.00AT PUBLICATION$365.32PRICE TARGET$443.00LAST$331.93
Company Snapshot
Texas Pacific Land Corporation
Oil Royalty Traders
Large Cap
Market Cap
$22.9B
P/E (TTM)
—
Dividend Yield
—
Beta
—
Avg Volume
—
200-Day Avg
—
Next Earnings
—
Employees
114

Texas Pacific Land Corp is mainly engaged in the sales and leases of land owned, retaining oil and gas royalties, and the overall management of the land owned. The group operates its business in two reportable segments: Land and Resource Management and Water Service and Operations. The Land and Resource Management segment, which generates maximum…

www.texaspacific.com
Price Levels
Entry
$355.00
Price Target
$443.00
Stop
$315.00
How These Levels Were Set

Entry 355.00 is the October 6 trading level per GuruFocus, a pullback toward the 50-day moving average of about 360.7 per Gotrade, versus a last confirmed close of 360.98 on October 9. Price target 443.00 is the average 12-month analyst target per Yahoo Finance and Investing.com. It rests on only 2 analysts, with a range of 247 to 639, and it is about 23% above the October 9 close. Support 340.00 is the October 2 close of 340.19 per Macrotrends, which is also near the late-September low. Stop 335.00 sits just below that zone. Resistance 398.50 is the 200-day SMA of 398.49 per Gotrade. The 52-week range is 269.23 to 547.20, and the high was set February 23, 2026.

Catalysts
  1. 1Q3 2026 results after the close on November 4, with the call on November 5, showing whether water sales volumes recover.
  2. 2A new data center or power land and water agreement, which management said it expects near term per the Q2 call.
  3. 3New Waha-area gas pipeline capacity coming online over the next few quarters, which would support Delaware activity and water sales.
Key Risks
  1. 1Valuation is still premium at roughly 34x forward earnings, so a slip in growth or oil prices could compress the multiple.
  2. 2Q2 royalty income benefited from a realized oil price of $97.55 per barrel per the Q2 release, and an unhedged royalty book falls as fast as it rose if crude…
  3. 3The data center story is unproven economically, since Kilby terms are largely undisclosed and the cash balance of $248.6 million sits well below the $700 mil…
Read the Full Thesis
The market is treating Q2 as a disappointment. Per Investing.com, EPS of $2.23 and revenue of $246.1 million missed estimates of $2.28 and $255.5 million, and the stock fell about 6% afterward. Sources differ on the revenue beat or miss, so check the consensus figure yourself. The miss looks like timing and mix, not a break in the model. Per the Q2 release, revenue rose 31% year over year, royalty production rose 20% to a record 39.7 thousand Boe per day, and produced water royalty volumes rose 15% to a record 4.9 million barrels per day. Adjusted EBITDA margin was 88% per the earnings call, with free cash flow of $155.5 million. The weak spot, water sales, fell 19% sequentially on weak in-basin gas prices. Management expects new gas pipeline capacity over the next few quarters to improve the Delaware mix. On top of that base sits optionality: the Chevron Project Kilby land and water agreement, and management's comments on 25 gigawatts of data center and power discussions per the Q2 call. TPL's land and water position is the scarce input for that kind of build-out. Valuation is the debate. Per GuruFocus, the trailing P/E is about 45x, but the forward P/E is about 34x. The case needs royalty volumes and water growth to hold, and at least one more large surface or power agreement to be announced.
Updates Since Publication
  1. Oct 13, 2026 · Price 365.32

    Weekly check-in: On Track. No new thesis evidence; Q3 date confirmed, price near entry, oil softer The past week brought scheduling and macro news, not company fundamentals. TPL confirmed on October 8 that Q3 results come after the close on November 4, with the call on November 5, so the first checkpoint is intact. Per CNN, the last close was about $365, roughly 33% below the $547.20 February high. That is slightly above the $355 entry level and well above the $335 stop. The Q2 'miss' framing is shaky: TipRanks shows $2.23 EPS against about $2.18 expected, which would be a beat, so the case's source is contested.

  2. Oct 20, 2026 · Price 337.83

    Weekly check-in: On Track. No new catalysts; shares slid below entry on a quiet week, oil firmer No results, guidance or filings landed this week, so the thesis evidence is unchanged. The one thesis-relevant move was price: TPL slid from about $369 earlier in the month to roughly $338 intraday on Oct 20. That is below the $355 entry and about 7% above the $315 stop, with no company news to explain it. Oil firmed, which helps the unhedged royalty book. The data center agreement and the Q3 water-volume recovery are still unproven until Nov 4.

Revision History

1 published revision. Performance is measured from the original publication, not from any revision.

  1. Revision 1 · Oct 17, 2026, 4:03 PM UTC
    • Stop
      $335.00→$315.00
    • How the Levels Were Set
      Before
      —
      After
      Entry 355.00 is the October 6 trading level per GuruFocus, a pullback toward the 50-day moving average of about 360.7 per Gotrade, versus a last confirmed close of 360.98 on October 9. Price target 443.00 is the average 12-month analyst target per Yahoo Finance and Investing.com. It rests on only 2 analysts, with a range of 247 to 639, and it is about 23% above the October 9 close. Support 340.00 is the October 2 close of 340.19 per Macrotrends, which is also near the late-September low. Stop 335.00 sits just below that zone. Resistance 398.50 is the 200-day SMA of 398.49 per Gotrade. The 52-week range is 269.23 to 547.20, and the high was set February 23, 2026.
  2. Originally published Oct 13, 2026, 6:27 PM UTC.
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Investment case published by @research_desk. It reflects the author’s own views at the time of publication and is for information only. It is not investment advice or a recommendation to buy or sell any security. Prices and company data are delayed and may be inaccurate. User content is not verified. Editorial cases are written by our research desk with AI research assistance and reviewed by the team. · How we measure performance

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Long $TPL | Investment Case. TPL combines unhedged Permian royalties, a growing water and surface-use business and about 88% EBITDA margins with almost no debt. The share price is about 34% below its Februa…