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Investing.com - Texas Pacific Land Trust (NYSE:TPL) stock rating was upgraded from Hold to Buy at Texas Capital Securities on Thursday, with the price target raised to $1,280.00 from $1,240.00. The upgrade comes as InvestingPro data shows the company maintains impressive gross profit margins of 93.5% and boasts a GREAT financial health score.
The upgrade follows meetings on June 23, 2025, between Texas Capital Securities and Texas Pacific Land’s management team, including the company’s CEO, CFO, and VP of Finance and Investor Relations in Boston.
Texas Capital Securities noted that TPL has underperformed its closest peer by 25% since March despite an increasingly positive outlook on its next-generation businesses.
The firm believes management will commercially de-risk its desalination project and advance one of its power generation and data center opportunities by the end of the year.
Texas Capital Securities also views TPL as "the natural consolidator of some of the larger ranches in the Permian that are expected to come to market over the next three to five years."
In other recent news, Texas Pacific Land Corporation reported its first-quarter earnings for 2025, revealing a slight miss on revenue expectations. The company posted earnings per share of $5.24, narrowly missing the forecasted $5.27. Revenue came in at $196 million, falling short of the anticipated $228 million. Despite the revenue miss, the company maintained a strong adjusted EBITDA margin of 86.4% and achieved a 25% year-over-year growth in oil and gas royalty production. Texas Pacific Land Corporation continues to focus on strategic innovations, including desalination projects, to bolster its long-term growth prospects. The company also maintains a robust financial position with a net cash position of $460 million and zero debt. Analysts from Texas Capital noted the company’s resilience in handling commodity price fluctuations, emphasizing its strong operational performance. Texas Pacific Land Corporation is exploring opportunities for stock buybacks and the acquisition of high-quality royalty assets to enhance shareholder value.
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