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Transportadora De Gas Sa Ord B (TGS)
NYSE:TGS
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Transportadora De Gas Sa Ord B
(NYSE:TGS)
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Rating:69Neutral
Price Target:
$34.00
▲(2.07% Upside)
Action:ReiteratedDate:03/17/26
The score is primarily driven by improved recent operating performance but moderated by higher leverage and weaker/less consistent free-cash-flow conversion. Technicals are supportive with price above key moving averages, while valuation is attractive on a low P/E and moderate yield. Earnings-call commentary adds caution due to near-term profitability headwinds, higher interest costs, and no expected 2026 dividend despite solid project progress.
Positive Factors
Regulated pipeline cash flows
A large regulated transportation business generating steady EBITDA provides durable base cash flow. Firm and interruptible tariff revenues and recent growth in interrupted transport underpin predictable revenue streams that support operations, maintenance and funding of multi-year pipeline expansion plans.
Proven access to long-term financing
An oversubscribed 10-year bond demonstrates strong investor confidence and secures long-duration funding for capital projects. Reliable capital access materially reduces execution risk for the Perito Moreno expansion and NGL FID, improving the likelihood projects reach cash-generating operations on schedule.
Growing midstream volumes and diversification
Rapid midstream throughput growth, especially in Vaca Muerta, increases nonregulated EBITDA share and diversifies revenue away from purely tariff-based income. Higher processing volumes and rising liquids sales create sustainable volume-driven margin expansion if maintained, improving resilience to regulated-sector cyclicality.
Negative Factors
Material rise in indebtedness
A sharp increase in debt elevates interest expense and refinancing vulnerability over the medium term. Higher leverage reduces financial flexibility to absorb downturns or fund capex internally, making the company more sensitive to interest-rate moves and commodity-driven earnings swings when large projects require sustained investment.
Weak/uneven free cash flow conversion
Relatively low FCF conversion versus net income and year-to-year inconsistency mean less internal funding for capex and debt service. With sizable planned CAPEX (> $600M in 2026 and multi-year project spend), constrained free cash flow increases reliance on external financing and raises execution and liquidity risk over the next 2–3 years.
NGL price and earnings volatility
Significant sensitivity of liquids EBITDA to international NGL prices creates durable earnings volatility. Given the company's NGL processing and planned liquids-focused projects, sustained weak export prices would compress margins, lower cash returns on new investments and amplify downside during global commodity cycles.
Transportadora De Gas Sa Ord B (TGS) vs. SPDR S&P 500 ETF (SPY)
Market Cap
$5.29B
Dividend Yield2.97%
Average Volume (3M)229.21K
Price to Earnings (P/E)13.9
Beta (1Y)0.43
Revenue Growth30.37%
EPS Growth122.40%
CountryUS
Employees1,147
SectorEnergy
Sector Strength52
IndustryOil & Gas Integrated
Share Statistics
EPS (TTM)0.67
Shares Outstanding69,513,695
10 Day Avg. Volume269,996
30 Day Avg. Volume229,210
Financial Highlights & Ratios
PEG Ratio0.43
Price to Book (P/B)2.17
Price to Sales (P/S)3.42
P/FCF Ratio25.21
Enterprise Value/Market Cap1.55K
Enterprise Value/Revenue4.96
Enterprise Value/Gross Profit9.23
Enterprise Value/Ebitda9.20
Forecast
1Y Price Target
$46.00Price Target Upside38.10% Upside
Rating ConsensusModerate Buy
Number of Analyst Covering1
EPS Forecast (FY)2.48
Revenue Forecast (FY)$1.33B
Transportadora De Gas Sa Ord B Business Overview & Revenue Model
Company DescriptionTransportadora de Gas del Sur S.A. engages in transportation of natural gas, production, and commercialization of natural gas liquids in Argentina. The company operates through four segments: Natural Gas Transportation Services; Liquids Production and Commercialization; Other Services; and Telecommunications. The Natural Gas Transportation segment transports natural gas through 5,769 miles of pipeline system to distribution companies, power plants, and industrial customers. It also provides operation and maintenance services for the natural gas transportation facilities. The company's Liquids Production and Commercialization segment produces and commercializes natural gas liquids, such as ethane, liquid petroleum gas, natural gasoline, propane, and butane in Argentina and internationally. Its Other Services segment offers midstream services, including natural gas treatment, separation, and removal of impurities from the natural gas stream, as well as natural gas compression. It also provides services related to pipeline and compression plant construction, operation, and maintenance; and generates steam for electricity production. The Telecommunications segment provides telecommunication services with a network that includes a microwave digital network with synchronous digital hierarchy technology and a dark fiber optic network. As of December 31, 2021, it served 6.2 million residential, commercial, industrial, and electric power generation end users. The company was founded in 1992 and is headquartered in Buenos Aires, Argentina. Transportadora de Gas del Sur S.A. is a subsidiary of Compañía de Inversiones de Energía S.A.
How the Company Makes MoneyTGS primarily makes money through two main business lines. (1) Natural gas transportation: TGS earns revenue by providing regulated natural gas pipeline transportation services, charging tariffs for firm and interruptible capacity and for moving gas through its transmission system; this segment’s earnings are driven by contracted capacity, transported volumes, regulated tariff frameworks, and the availability/operation of compression and pipeline assets. (2) Midstream / NGL production and commercialization: TGS generates revenue by processing natural gas to extract NGLs and selling those products; earnings in this segment are influenced by processing throughput, recovery yields, and realized market prices for NGL products. Additional revenue can come from ancillary pipeline services and other midstream-related services where applicable. Specific partnership details and the exact tariff/contract structures are null.
Transportadora De Gas Sa Ord B Earnings Call Summary
Earnings Call Date:Feb 27, 2026
(Q4-2025)
| % Change Since: |
Next Earnings Date:May 11, 2026
Earnings Call Sentiment Neutral
The call presented a mixed picture: strong strategic progress and financing (oversubscribed bond, cash build-up, advancing Perito Moreno expansion and NGL project toward FID, and a 36% increase in midstream EBITDA) counterbalanced by notable near-term financial pressures (Q4 net income down ~27%, liquids EBITDA down ~18%, weak export prices, higher interest costs and negative financial results). Execution milestones and strengthened liquidity support medium-term growth, but recent earnings and price headwinds weigh on short-term performance.Q4-2025 Updates
Positive Updates
Successful Bond Issuance and Strong Demand
Issued a new 10-year bond in November (referenced as ARS 500 million / $500 million in the call) at 8% yield; transaction was oversubscribed with a total order book of $1.3 billion, providing funding for expansion projects.
Significant Increase in Cash Position
Cash position rose by ARS 864 billion during Q4 2025 to ARS 1,808 billion (approx. $1.25 billion at the official exchange rate), largely driven by the bond issuance.
Strong EBITDA Generation and Shift to Nonregulated Activities
Q4 2025 EBITDA generation reached nearly ARS 259 billion, with 57% generated by nonregulated businesses, highlighting increasing relevance of nonregulated activities.
Natural Gas Transportation EBITDA Slightly Up
Natural Gas Transportation EBITDA increased to ARS 109.8 billion in Q4 2025 from ARS 107.1 billion in Q4 2024, a roughly 2.6% increase, supported by higher interrupted transportation revenue (ARS 9.6 billion) and lower operating expenses (ARS 0.54 billion).
Midstream & Other Services EBITDA Surge
Midstream and other services EBITDA rose 36% year-over-year to ARS 60.7 billion (from ARS 44.5 billion), driven by higher billed volumes in Vaca Muerta: transported natural gas billed volume up from 28 to 33 million cubic per day (~17.9% increase) and conditioning volume up from 19 to 27 million cubic per day (~42.1% increase).
Liquids Volume Growth and Domestic Price Improvements
Liquids sales volumes increased 4.4% YoY (338,000 to 353,000 metric tons), contributing ARS 7 billion of incremental EBITDA; domestic butane price deregulation under Programa Hogar allowed sales at export parity, generating ARS 9.9 billion in additional revenue; positive monetary effect added ARS 13.7 billion.
Progress on Perito Moreno Expansion and CapEx Plans
Perito Moreno pipeline expansion underway with estimated project CapEx ~$780 million; three new compressor stations expected in service by May 2027; planned CapEx deployment ~ $100 million in 2025, >$500 million in 2026 and remainder in 2027.
NGL Project Moving Toward FID and Financing Plans
NGL project negotiations with gas producers ongoing; management expects FID before June (possibly May); estimated project cost approximately $2.9 billion with potential project finance of around $1 billion and an SPV structure under consideration.
Insurance Divestment Advance Payments Collected
Received advance payments of roughly $10 million related to the Surrey insurance divestment; final audit expected this month with potential recovery timing around June-July.
Negative Updates
Decline in Reported Net Income
Total net income in Q4 2025 was ARS 124 billion versus ARS 170.5 billion in Q4 2024, a decline of ARS 46.5 billion (approximately -27.3% YoY).
Liquids EBITDA Contraction
Liquids EBITDA decreased to ARS 83.9 billion in Q4 2025 from ARS 102.0 billion in Q4 2024, a decline of ARS 18.1 billion (about -17.8% YoY), primarily due to lower export prices and higher costs.
Export Price Weakness
Export NGL prices fell between ~17% and ~33%, which reduced liquids EBITDA by approximately ARS 31.1 billion.
Higher Operating and Insurance Costs from Climate Event
Higher operating costs and climate-event-related insurance reimbursable expenses reduced EBITDA by ARS 12.8 billion and ARS 4.9 billion, respectively.
Negative Variation in Financial Results and Higher Interest Costs
Financial results worsened by ARS 17.9 billion in Q4 2025, mainly due to ARS 12.3 billion higher interest costs associated with increased indebtedness (including the bond issuance) and an ARS 8.1 billion decrease in income from financial assets.
Inflation and Monetary Effects Eroding Real Value
Transportation tariff adjustments added ARS 31.9 billion but were insufficient to offset an inflation loss effect of ARS 40.9 billion; real returns from financial investments declined ARS 11.8 billion because exchange rate appreciation lagged inflation.
Increased Working Capital and Large Tax Payments
Working capital rose by ARS 76 billion; the company paid ARS 61.6 billion in income taxes in the period, contributing to cash outflows despite higher cash balance from financing.
No Near-Term Dividend Expected
Management indicated no expected dividend payments in 2026 as cash is being prioritized for project investments (noted as management opinion, subject to shareholder decision).
Market Price Uncertainty for NGLs
International NGL prices were weak recently; while management's outlook remains similar to the prior year, they acknowledged geopolitical risks that could affect prices (positive or negative) creating near-term pricing uncertainty.
Company Guidance
The company guided that the NGL project is on track for a final investment decision before June (likely May) with estimated project CAPEX of about $2.9 billion and around $1 billion of project finance being sought, while the Perito Moreno/regulated pipeline expansion will add 14 million m3/day (plus a final tranche of ~12 million m3/day) funded largely from proceeds of the November bond (reported as $500M/ARS500M, 10‑year at 8%) and ~$67M of bank loans; Perito Moreno CAPEX is ~ $780M (≈ $100M in 2025, >$500M in 2026, remainder in 2027), three new compressor stations expected in service by May‑2027, an open season launched Feb 9 with bids for the 40% prepaid capacity due Mar 16 and remaining capacity to be tendered after ENARSA reallocates 21 million m3/day (currently assigned to CAMMESA), management expects sufficient gas supply for the NGL project, plans CAPEX >$600M in 2026 (> $500M expansion + ~$100M maintenance), and does not currently anticipate dividend payments in 2026.Transportadora De Gas Sa Ord B Financial Statement Overview
Summary
Strong recent profitability and a sharp acceleration in revenue/earnings in 2025 support the score, but it is offset by a dramatic rise in debt in 2025 and uneven cash conversion with declining free cash flow.Income Statement
Profitability is strong in the most recent year, with high gross and operating margins and a solid net margin. Revenue growth accelerated sharply in 2025 versus 2024, indicating strong momentum. The main weakness is volatility across the period—2023 showed much weaker profitability and slightly negative revenue growth, suggesting earnings can swing meaningfully with conditions.78
Positive
Balance Sheet
The company maintains moderate leverage overall, with debt-to-equity at a manageable level in 2025 and equity representing a substantial portion of the capital base. However, debt increased dramatically in 2025 versus 2024, reducing balance-sheet flexibility and raising risk if operating conditions soften. Returns on equity are decent in 2024–2025 but were much lower in 2023, reinforcing the variability.62
Positive
Cash Flow
Operating cash generation is solid and covers accounting earnings in 2024–2025, and free cash flow remains positive. That said, free cash flow declined in 2025 and free cash flow is relatively low versus net income (roughly ~40% in 2024–2025), implying meaningful reinvestment needs or working-capital/capex drag. Earlier years show notable inconsistency in cash conversion trends.57
Neutral
| Breakdown | Dec 2025 | Dec 2024 | Dec 2023 | Dec 2022 | Dec 2021 |
|---|---|---|---|---|---|
Income Statement | |||||
| Total Revenue | 1.99T | 1.21T | 967.50B | 1.08T | 526.69B |
| Gross Profit | 1.06T | 631.37B | 347.43B | 427.73B | 237.57B |
| EBITDA | 1.10T | 767.48B | 280.66B | 513.69B | 289.63B |
| Net Income | 490.32B | 370.16B | 51.21B | 219.16B | 126.97B |
Balance Sheet | |||||
| Total Assets | 5.41T | 3.39T | 3.32T | 1.28T | 405.52B |
| Cash, Cash Equivalents and Short-Term Investments | 1.81T | 796.54B | 717.45B | 131.66B | 34.48B |
| Total Debt | 1.67T | 528.15B | 918.21B | 288.97B | 102.42B |
| Total Liabilities | 2.29T | 1.16T | 1.46T | 451.13B | 170.61B |
| Stockholders Equity | 3.13T | 2.23T | 1.86T | 832.16B | 234.91B |
Cash Flow | |||||
| Free Cash Flow | 269.36B | 194.36B | 118.66B | 68.54B | 125.28B |
| Operating Cash Flow | 642.72B | 484.17B | 412.82B | 240.15B | 183.80B |
| Investing Cash Flow | -529.51B | -384.90B | -449.53B | -272.72B | -183.70B |
| Financing Cash Flow | 762.75B | -31.35B | 53.68B | 24.59B | -5.82B |
Transportadora De Gas Sa Ord B Technical Analysis
Positive
33.31
Price Trends
30.26
Positive
30.41
Positive
27.88
Positive
Market Momentum
0.53
Negative
67.70
Neutral
90.90
Negative
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For TGS, the sentiment is Positive. The current price of 33.31 is above the 20-day moving average (MA) of 30.26, above the 50-day MA of 30.26, and above the 200-day MA of 27.88, indicating a bullish trend. The MACD of 0.53 indicates Negative momentum. The RSI at 67.70 is Neutral, neither overbought nor oversold. The STOCH value of 90.90 is Negative, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for TGS.
Transportadora De Gas Sa Ord B Peers Comparison
UnderperformOutperform
Sector (65)
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
71 Outperform | $8.88B | 10.05 | 21.09% | 2.57% | 28.56% | 593.72% | |
69 Neutral | $5.29B | 13.85 | 14.77% | 2.97% | 30.37% | 122.40% | |
67 Neutral | $29.81B | 12.89 | 11.20% | 18.88% | -7.45% | -28.80% | |
67 Neutral | $106.37B | 12.11 | 3.33% | 7.43% | 1.53% | -35.81% | |
65 Neutral | $15.17B | 7.61 | 4.09% | 5.20% | 3.87% | -62.32% | |
62 Neutral | $80.96B | 19.50 | 5.20% | 5.41% | -3.84% | 15.75% | |
57 Neutral | $17.20B | -17.14 | -2.22% | ― | -2.76% | 56.81% |
* Energy Sector Average
TGS
Transportadora De Gas Sa Ord B
33.31
6.69
25.12%
EC
Ecopetrol SA
14.64
5.49
59.97%
E
Eni SPA
54.73
25.02
84.23%
NFG
National Fuel Gas Company
93.47
16.74
21.82%
EQNR
Equinor ASA
40.51
15.94
64.88%
YPF
YPF Sociedad Anonima
41.59
5.06
13.85%
Transportadora De Gas Sa Ord B Corporate Events
Transportadora de Gas del Sur Posts Lower Q4 2025 Profit but Secures Record 10-Year Bond
Feb 27, 2026
On February 27, 2026, Transportadora de Gas del Sur reported fourth-quarter 2025 comprehensive income of ARS 123,982 million, down from ARS 170,513 million a year earlier, as operating profit fell to ARS 207,192 million amid the absence of a large prior-year impairment reversal and higher costs. Revenues in the quarter to December 31, 2025 edged up to ARS 473,480 million, supported by natural gas transportation and other services despite weaker liquids income, while financial results swung to a ARS 10,084 million loss on higher interest expenses and lower returns on financial assets.
Cost of sales plus selling and administrative expenses rose by ARS 12,847 million, driven by higher depreciation, insurance, third-party services, labor and a receivables impairment in midstream, partly offset by lower gas purchase costs and export duties. The natural gas transportation segment’s operating profit dropped to ARS 79,690 million from ARS 130,302 million, though it continued to represent about 38% of total revenue, and in November 2025 the company strengthened its capital structure with a heavily oversubscribed US$500 million, 10-year international bond, the longest-dated debt in its history, underscoring robust investor confidence despite margin pressure.
The most recent analyst rating on (TGS) stock is a Buy with a $36.00 price target. To see the full list of analyst forecasts on Transportadora De Gas Sa Ord B stock, see the TGS Stock Forecast page.
Glossary
BuyA stock rated as a "Buy" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock is likely to deliver higher returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
HoldA stock rated as a "Hold" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly compelling nor unfavorable for investment. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
SellA stock rated as a "Sell" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock may deliver lower returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
Disclaimer
This AI Analyst Stock Report is automatically generated by our AI systems using advanced algorithms and publicly available financial, technical, and market data. While the information provided aims to be accurate and insightful, it is intended for informational purposes only and should not be considered financial advice. Any content created by an AI (Artificial Intelligence) system may contain inaccuracies and/or contain errors. Investing in stocks carries inherent risks, and past performance is not indicative of future results. This report does not account for your personal financial circumstances, objectives, or risk tolerance. Always conduct your own research or consult with a qualified financial advisor before making investment decisions. The analysis and recommendations provided are based on historical and current data and may not fully reflect future market conditions or unexpected developments. Neither the creators of this report nor its affiliated entities guarantee the accuracy, completeness, or reliability of the information presented. Use this report at your own discretion and risk.