Texas Pacific Land shares climbed roughly 3% on Monday after KeyBanc raised its price target on the stock to $639, citing stronger investor interest and revised expectations for the company’s growth trajectory across multiple business lines.
KeyBanc analysts reported a substantial rise in client engagement in 2026, with inquiries coming from long-only managers, traditional long/short funds and generalist investors. The firm said that a large number of clients requested introductory briefings on the company, which it noted has outperformed thus far this year - up 74% year-to-date compared with a 1% gain for the S&P 500.
The brokerage attributed the recent uplift in the share price to two developments. First, Texas Pacific Land’s investment in Bolt Data in December; and second, subsequent media coverage suggesting an agreement between Bolt and Google. According to KeyBanc, those events prompted a reset in investor expectations around the company’s earnings growth and valuation potential.
In its revised approach to valuation, KeyBanc said it now employs a sum-of-the-parts framework for Texas Pacific Land and applies a 10% discount rate to its forecast earnings. The analysts emphasized that much of the recent re-pricing appears to reflect investors placing higher value on anticipated expansion in the company’s water segment.
Reflecting that view, KeyBanc raised its earnings estimates for 2026 and 2027, citing higher water sales revenue after what it described as a record fourth quarter and assumptions of continued volume growth. The firm expects that strong organic growth will come from all of Texas Pacific Land’s existing segments, which it listed as oil and gas royalties, water sales, produced water royalties, and surface and land easements.
KeyBanc also highlighted operational indicators that support organic production growth. The firm noted permit filings in the Delaware Basin are showing longer lateral lengths, which aligns with its assessment that the current 19.5 net line-of-sight well count can support increased production. KeyBanc said it sees parallel trends in water sales and produced water royalties, where volumes have continued to trend higher.
Looking further ahead, KeyBanc expects surface and land easements to contribute additional growth in 2027, when right-of-way payment resets are projected to boost tariff payments by approximately 35%.
Below are the principal takeaways from KeyBanc’s assessment and the market reaction:
- Price target increase to $639 coincided with a roughly 3% intraday rise in TPL shares.
- Investor engagement in 2026 expanded materially, across diverse investor types, driving renewed attention to the stock.
- Analysts raised 2026 and 2027 earnings estimates, primarily on higher expected water sales following a record quarter.
KeyBanc’s analysis underscores the importance of the water business to Texas Pacific Land’s near-term valuation case, while also pointing to continued contributions from royalties and land-related revenue streams. The firm’s use of a sum-of-the-parts valuation and a 10% discount rate encapsulates its view that investor expectations have shifted materially in response to recent corporate developments and sector-level activity.
The market’s response on Monday, with a single-digit percentage gain in the stock following the analyst note and target lift, reflects the recalibration of expectations across both growth and earnings metrics cited by KeyBanc.