Is Texas Pacific Land Stock Underperforming the Nasdaq?

With a market cap. of $23.3 billion, Texas Pacific Land Corporation (TPL) is one of the largest land and royalty owners in Texas, with most of its holdings concentrated in the Permian Basin. Rather than producing oil and gas directly, the company generates revenue from its land, mineral, and royalty interests throughout the lifecycle of wells. 

Companies valued at more than $10 billion are generally considered “large-cap” stocks, and Texas Pacific Land fits this criterion perfectly. Its diverse revenue streams include easements and leases, water services, material resources, subsurface rights, and oil and gas royalties.

Shares of the Dallas, Texas-based company have decreased 37.8% from its 52-week high of $547.20. Over the past three months, the stock has fallen 13.3%, lagging behind the broader Nasdaq Composite’s ($NASX) 6.4% gain during the same period.

Longer term, shares of the company have risen 9.9% over the past 52 weeks, lagging behind NASX's 20.6% increase over the same time frame. However, TPL stock is up 18.1% on a YTD basis, outperforming NASX’s 16.1% return. 

The stock has been trading above its 200-day moving average since last year.

Texas Pacific Land has faced periods of weakness as broad energy-sector selloffs and falling oil prices have pressured sentiment toward its energy-linked royalty business. Investors are also weighing the company’s dependence on Permian oil and gas activity alongside risks from tighter water regulations and decarbonization pressures.

In comparison, rival ConocoPhillips (COP) has outpaced TPL stock. COP stock has soared 37.2% on a YTD basis and 32.6% over the past 52 weeks. 

Despite the stock’s underperformance over the past year, analysts remain moderately optimistic about its prospects. TPL stock has a consensus rating of “Moderate Buy” from three analysts in coverage, and the mean price target of $442.33 is a premium of 29.9% to current levels.