A Look at Texas Pacific Land’s Valuation Following New $500M Credit Facility and Dual Listing Plans

Texas Pacific Land (TPL) has just unveiled a $500 million revolving credit facility, which drew strong lender interest and allows for future expansion. The company is also preparing for a dual listing on the NYSE Texas exchange in August.

See our latest analysis for Texas Pacific Land.

Despite the excitement around the new credit facility and upcoming dual listing, Texas Pacific Land’s share price has not yet reflected a boost; the stock is down over 20% year-to-date, while its total shareholder return for the past year sits at -19.1%. Still, with a massive 512% five-year total return, long-term shareholders have seen significant growth even as momentum has slowed recently.

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So with recent financial maneuvers and a major new listing on the horizon, is Texas Pacific Land now trading below its true value or is the market already anticipating future growth potential and pricing it in? Could this be a buying opportunity?

Most Popular Narrative: 2% Overvalued

Texas Pacific Land’s current market price sits slightly above the narrative fair value estimate, creating a striking mismatch as the company heads into a transformative period.

Rising ESG investment mandates and increasing institutional aversion to fossil fuel assets may lead to shrinking market participation and a lower valuation multiple for TPL's shares, even if near-term financials remain robust. This could pressure both the company's stock price and access to capital.

Read the complete narrative.

Wondering what’s driving this bold narrative price target? The story hinges on ambitious margin expansion and a surprising forecast for future profits. Curious which specific growth assumptions are embedded in that valuation? Find out what analysts are counting on to justify today’s lofty multiple.

Result: Fair Value of $921.93 (OVERVALUED)

Have a read of the narrative in full and understand what's behind the forecasts.

Still, robust royalty growth or stronger water services expansion could offset some bearish expectations and push earnings higher than analysts currently forecast.

Find out about the key risks to this Texas Pacific Land narrative.

Build Your Own Texas Pacific Land Narrative

If you see the story differently or want to dive deeper into the numbers yourself, it takes just a few minutes to build your own unique perspective. Do it your way.

A great starting point for your Texas Pacific Land research is our analysis highlighting 1 key reward and 1 important warning sign that could impact your investment decision.

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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.

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