Targa Resources (TRGP) AI Stock Analysis

• Market Cap: $35.13B
• Dividend Yield: 2.15%
• Average Volume (3M): 1.48M
• Price to Earnings (P/E): 23.4
• Beta (1Y): 0.87
• Revenue Growth: 5.88%
• EPS Growth: 46.35%
• Country: US
• Employees: 3,370
• Sector: Energy
• Sector Strength: 62
• Industry: Oil & Gas Midstream
• EPS (TTM): 2.90
• Shares Outstanding: 215,191,850
• 10 Day Avg. Volume: 1,521,674
• 30 Day Avg. Volume: 1,483,286
• PEG Ratio: N/A
• Price to Book (P/B): N/A
• Price to Sales (P/S): N/A
• P/FCF Ratio: N/A
• Enterprise Value/Market Cap: 1.55
• Enterprise Value/Revenue: 3.16
• Enterprise Value/Gross Profit: 15.17
• Enterprise Value/Ebitda: 12.13
• 1Y Price Target: $206.23
• Price Target Upside: 27.95% Upside
• Rating Consensus: Strong Buy
• Number of Analyst Covering: 13

• Rating: 66 Neutral
• Price Target: $179.00 ▲(11.06% Upside)

Targa Resources' overall stock score is driven by strong earnings call performance and solid financial profitability. However, high leverage, declining cash flow, and bearish technical indicators weigh down the score. The valuation suggests potential overvaluation, but strategic initiatives like share repurchases provide a positive outlook.

Positive Factors

Earnings

TRGP reported a slight beat in EBITDA due to higher-than-expected volume increase, with continued strength in added Permian volumes.

Growth Strategy

TRGP increased growth capex from $2.7B to $3B on project accelerations, showing commitment to future growth.

Tax Legislation

Targa does not expect to be a material cash taxpayer until post-2027, benefiting from recently approved tax legislation.

Negative Factors

Geopolitical Tensions

Recent geopolitical tensions have increased customer interest in TRGP’s LPG export offerings, with reverse inquiries from Asian emerging markets.

Market Conditions

TRGP's rigs have largely stayed flat despite the broader market fluctuations, indicating stability and potential for future growth.

Targa Resources Business Overview & Revenue Model

Company Description

Targa Resources Corp. is a leading provider of natural gas and natural gas liquids services in the United States. The company operates in two main segments: the Natural Gas and Natural Gas Liquids (NGL) segments. Targa's core products and services include the processing, transportation, and storage of natural gas and NGLs, catering to a diverse range of customers, including producers and marketers of natural gas, as well as industrial users and utilities.

How the Company Makes Money

Targa Resources generates revenue primarily through its fee-based contracts and commodity sales. The Natural Gas segment earns income by processing natural gas and transporting it through its extensive pipeline network, charging fees for these services. The NGL segment generates revenue by fractionating NGLs and selling them on the market, where prices can fluctuate based on supply and demand. Additionally, Targa benefits from its strategic partnerships and joint ventures, which enhance its operational capabilities and market reach. Factors contributing to its earnings include the volume of natural gas processed and transported, prevailing market prices for natural gas and NGLs, and the overall demand for energy in the regions it serves.

Targa Resources Financial Statement Overview

Summary

Targa Resources shows strong profitability and efficient operations with solid income statement metrics. However, high leverage and declining free cash flow growth present potential risks. The company needs to manage its debt levels carefully while maintaining operational efficiency.

Income Statement

Targa Resources shows a solid performance in its income statement with a consistent revenue growth rate of 2.48% in the TTM period. The company maintains healthy gross and net profit margins at 22.34% and 9.70% respectively, indicating strong profitability. However, the gross profit margin has decreased from previous periods, and the revenue growth rate has slowed compared to earlier years. The EBIT and EBITDA margins are robust, reflecting efficient operations.

Balance Sheet

The balance sheet reveals a high debt-to-equity ratio of 6.51, indicating significant leverage, which could pose financial risks. However, the return on equity is impressive at 64.04%, showcasing effective use of equity to generate profits. The equity ratio is relatively low, suggesting a heavy reliance on debt financing.

Cash Flow

Cash flow analysis shows a decline in free cash flow growth by 33.15% in the TTM period, which is a concern. However, the operating cash flow to net income ratio is healthy at 1.16, indicating good cash generation relative to net income. The free cash flow to net income ratio is lower, reflecting reduced free cash flow relative to net income.

Breakdown	TTM	Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Income Statement
Total Revenue	17.29B	16.63B	15.62B	21.68B	17.44B	8.27B
Gross Profit	3.60B	3.33B	2.54B	2.79B	2.09B	1.52B
EBITDA	4.50B	4.14B	3.97B	3.21B	1.70B	-313.10M
Net Income	1.52B	1.27B	828.20M	1.14B	71.20M	-1.55B
Balance Sheet
Total Assets	23.51B	22.73B	20.67B	19.56B	15.21B	15.88B
Cash, Cash Equivalents and Short-Term Investments	113.10M	157.30M	141.70M	219.00M	158.50M	242.80M
Total Debt	16.85B	14.27B	13.01B	11.56B	6.63B	7.80B
Total Liabilities	20.80B	18.32B	16.06B	14.58B	10.03B	9.97B
Stockholders Equity	2.59B	2.59B	2.74B	2.67B	2.01B	2.65B
Cash Flow
Free Cash Flow	427.50M	683.90M	826.20M	1.05B	1.80B	792.90M
Operating Cash Flow	3.68B	3.65B	3.21B	2.38B	2.30B	1.74B
Investing Cash Flow	-3.36B	-3.02B	-2.40B	-4.15B	-473.20M	-738.10M
Financing Cash Flow	-374.10M	-612.80M	-888.10M	1.83B	-1.91B	-1.09B

Targa Resources Technical Analysis

• Technical Analysis Sentiment: Neutral
• Last Price: 161.18
• 50DMA: Negative
• 100DMA: Negative
• 200DMA: Negative
• MACD: Positive
• RSI: Neutral
• STOCH: Neutral

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For TRGP, the sentiment is Neutral. The current price of 161.18 is below the 20-day moving average (MA) of 164.15, below the 50-day MA of 166.89, and below the 200-day MA of 179.30, indicating a bearish trend. The MACD of -1.18 indicates Positive momentum. The RSI at 46.95 is Neutral, neither overbought nor oversold. The STOCH value of 38.06 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Neutral sentiment for TRGP.

Targa Resources Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
EPD	80 Outperform	$68.62B	11.92	20.43%	6.76%	-0.55%	2.14%
MPLX	78 Outperform	$51.29B	12.04	31.38%	7.60%	4.67%	2.07%
OKE	73 Outperform	$46.87B	14.59	16.05%	5.48%	47.00%	11.86%
DKL	73 Outperform	$2.31B	14.66	542.39%	10.25%	-12.08%	1.44%
LNG	68 Neutral	$52.60B	13.85	68.91%	0.83%	11.20%	-8.80%
TRGP	66 Neutral	$35.13B	23.38	60.30%	2.15%	5.88%	46.35%
Sector *	65 Neutral	$15.25B	7.27	3.02%	5.36%	4.27%	-62.52%

Targa Resources Corporate Events

Targa Resources Announces $1 Billion Share Buyback

Targa Resources Corp. announced a new $1.0 billion share repurchase program approved by its Board of Directors on August 4, 2025, adding to the existing program. The company reported a significant increase in net income and adjusted EBITDA for the second quarter of 2025 compared to the previous year, driven by record transportation volumes and strategic growth projects. Targa also declared a quarterly cash dividend and outlined plans for early completion of several projects, including expansions in the Permian Basin, which are expected to enhance connectivity and support future growth.

Targa Resources Appoints New President of Logistics

On August 1, 2025, D. Scott Pryor announced his retirement as President of Logistics and Transportation at Targa Resources, effective March 1, 2026, with no disagreements cited. Subsequently, on August 4, 2025, Benjamin J. Branstetter was appointed to the position, effective the same date, while continuing his role as Senior Vice President – Downstream Commercial until then. Branstetter’s extensive experience within the company and prior investment banking experience at Lazard, Inc. positions him well for this leadership role.

Targa Resources Extends Receivables Agreement to 2026

On July 28, 2025, Targa Resources Partners LP and Targa Receivables LLC, subsidiaries of Targa Resources Corp., executed a Sixteenth Amendment to their Receivables Purchase Agreement, extending the termination date of their accounts receivable securitization facility to August 31, 2026. This amendment reflects the company’s ongoing efforts to manage its financial operations effectively, maintaining approximately $600 million in trade receivable purchases outstanding, and highlights its continued collaboration with financial institutions for investment banking and commercial services.

Targa Resources Completes $1.5 Billion Senior Notes Offering

On June 18, 2025, Targa Resources Corp. completed a public offering of $1.5 billion in senior notes, with $750 million due in 2030 and another $750 million due in 2036. The proceeds from this offering are intended to redeem existing notes due in 2027 and support general corporate purposes, impacting the company’s financial strategy and potentially benefiting stakeholders by improving debt management.

Targa Resources Announces $1.5 Billion Senior Notes Offering

On June 4, 2025, Targa Resources Corp. announced the pricing of a $1.5 billion offering of senior notes, consisting of $750 million of 4.900% Senior Notes due 2030 and $750 million of 5.650% Senior Notes due 2036. The proceeds from this offering are intended to redeem the 6.500% Senior Notes due 2027 and for general corporate purposes, such as repaying borrowings and funding capital expenditures. This move is expected to impact Targa’s financial strategy by refinancing existing debt and supporting its operational investments.