KeyBanc has increased its 12-month price objective for Texas Pacific Land Trust (NYSE: TPL) to $639, up from $350, while maintaining an Overweight rating on the shares. The broker cited notable new developments tied to power generation and data center activity on the company’s surface acreage as the primary rationale for the change.
TPL shares have experienced substantial appreciation this year, advancing roughly 74% year-to-date and trading close to a 52-week high of $519. KeyBanc’s reassessment follows the firm’s initiation of coverage in December, when it began tracking emerging opportunities on the trust’s land holdings.
Tim Rezvan, the KeyBanc analyst leading the coverage, highlighted robust trends within Texas Pacific Land’s water segment as an additional positive driver. The company’s reported gross profit margin of 93% was cited as an indicator of strong unit economics and operational efficiency.
On the demand side, KeyBanc framed the power and data center build-out on TPL’s acreage as increasingly a question of timing rather than probability. The firm pointed to a potential Permian power generation build-out in excess of 30 gigawatts, a scale that it views as materially supportive of the trust’s surface-rights franchise.
From KeyBanc’s perspective, Texas Pacific Land occupies a favorable position both in terms of land holdings and water resources, factors the firm says support a sum-of-the-parts valuation framework. In response to these developments, KeyBanc raised its internal estimates for the company.
However, valuation considerations are not uniformly bullish. InvestingPro analysis flagged the stock as potentially overvalued at current market levels, listing it among companies on its Most Overvalued list. That view highlights a tension between near-term project opportunity and prevailing market prices.
Investors also have fresh quarterly financial data to weigh. Texas Pacific Land reported Q4 2025 earnings per share of $1.79, falling short of the $1.83 consensus estimate. Revenue for the quarter came in at $212 million versus an expected $214 million. The company did not report any mergers in the release. The modest earnings and revenue shortfalls were noted as meaningful by market participants assessing the company’s recent performance.
Analyst reactions to the quarter were not detailed in the company’s update, and the market is likely to watch closely for any guidance or strategic initiatives that Texas Pacific Land may provide going forward. For investors seeking deeper valuation and growth analysis, KeyBanc pointed to a comprehensive Pro Research Report available through InvestingPro, which covers this company alongside more than 1,400 other U.S. equities.
Overall, KeyBanc’s revised target reflects a recalibration of the company’s addressable opportunities on its surface acreage and an expectation that power and data center development is more imminent than previously assumed. At the same time, the company’s recent quarterly results and external valuation reviews introduce countervailing considerations for investors evaluating risk and reward.