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Texas Pacific (TPL) Soars 4.8%: Is Further Upside Left in the Stock?

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Texas Pacific (TPL - Free Report) shares rallied 4.8% in the last trading session to close at $1,258. This move can be attributable to notable volume with a higher number of shares being traded than in a typical session. This compares to the stock's 24.8% gain over the past four weeks.

Texas Pacific saw the fourth consecutive day of price increase since there has been increased optimism over the accelerated recovery in the energy sector following the massive improvement in oil prices. With significant exposure to core royalty acres in the prolific oil-rich Permian basin, the company, having debt-free balance sheet, will generate significant royalty income. Notably, the price target on the firm was raised by BWS Financial analyst Hamed Khorsand, while reaffirming a Buy rating, has also aided the stocks’ rally.

Price and Consensus

Price Consensus Chart for Texas Pacific

This landowner is expected to post quarterly earnings of $6.22 per share in its upcoming report, which represents a year-over-year change of -16%. Revenues are expected to be $79.72 million, down 17.5% from the year-ago quarter.

Earnings and revenue growth expectations certainly give a good sense of the potential strength in a stock, but empirical research shows that trends in earnings estimate revisions are strongly correlated with near-term stock price movements.

For Texas Pacific, the consensus EPS estimate for the quarter has been revised marginally higher over the last 30 days to the current level. And a positive trend in earnings estimate revision usually translates into price appreciation. So, make sure to keep an eye on TPL going forward to see if this recent jump can turn into more strength down the road.

The stock currently carries a Zacks Rank 2 (Buy). You can see the complete list of today's Zacks Rank #1 (Strong Buy) stocks here >>>>

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