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Targa Resources (TRGP)
NYSE:TRGP
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Targa Resources (TRGP) AI Stock Analysis

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TRGP

Targa Resources

(NYSE:TRGP)

Rating:75Outperform
Price Target:
$183.00
▲(11.84% Upside)
Targa Resources' overall score reflects strong financial performance, boosted by a positive earnings call highlighting significant growth and strategic initiatives. However, technical analysis indicates short-term bearish trends, and valuation metrics suggest the stock might be overvalued. The recent corporate event enhances financial flexibility, slightly offsetting leverage concerns.
Positive Factors
Business Outlook
TRGP management exuded notable confidence in the business outlook, leaving analysts to believe the stock price move has sharply diverged from Targa’s visible growth and provides a very attractive opportunity to lean into buybacks.
Geopolitical Tensions
Recent geopolitical tensions have increased customer interest in TRGP’s LPG export offerings, with reverse inquiries from Asian emerging markets.
Negative Factors
Growth Expectations
Growth vector is expected to slow in the coming years on slowing Permian NGL output.
Valuation
The equity is believed to be fully valued after pricing in aggressive growth estimates that capture full value-chain.

Targa Resources (TRGP) vs. SPDR S&P 500 ETF (SPY)

Targa Resources Business Overview & Revenue Model

Company DescriptionTarga Resources Corp. (TRGP) is a leading provider in the midstream natural gas and natural gas liquids (NGLs) sector. Headquartered in Houston, Texas, Targa operates an extensive network of integrated assets that gather, process, transport, and store natural gas and NGLs. The company serves a diverse range of customers, including producers, marketers, and end-users, by offering comprehensive services such as natural gas gathering and processing, NGL fractionation, storage, logistics, and transportation. Targa Resources is a key player in the energy infrastructure industry, focused on maintaining operational excellence and safety while optimizing its asset base for long-term growth and sustainability.
How the Company Makes MoneyTarga Resources generates revenue primarily through its extensive midstream energy operations, which are structured around its key business segments: Gathering and Processing, and Logistics and Transportation. In the Gathering and Processing segment, the company makes money by providing services that include gathering raw natural gas from production sites, processing it to remove impurities and extract NGLs, and then delivering these products to downstream markets or other pipeline systems. Fees are typically based on the volume of gas and NGLs handled, providing a stable income stream. In the Logistics and Transportation segment, Targa earns revenue by fractionating mixed NGL streams into individual products such as ethane, propane, and butanes, and by offering storage, terminaling, and transportation services. The company operates a network of pipelines, storage facilities, and export terminals, earning fees for transporting and storing hydrocarbons. Additionally, Targa's financial performance is bolstered by strategic partnerships and joint ventures that enhance its service offerings and expand its market reach, as well as by favorable long-term contracts that provide steady cash flows.

Targa Resources Earnings Call Summary

Earnings Call Date:May 01, 2025
(Q1-2025)
|
% Change Since: -3.68%|
Next Earnings Date:Aug 07, 2025
Earnings Call Sentiment Positive
The earnings call highlighted a record quarter for Targa Resources with strong financial performance, significant share repurchases, and robust growth in the Permian Basin volumes. Despite some challenges from winter weather and potential cost impacts from global tariffs, the company maintains a positive outlook with a strong financial position and increased dividends.
Q1-2025 Updates
Positive Updates
Record Quarterly Adjusted EBITDA
Targa Resources Corp. reported record quarterly adjusted EBITDA of $1.179 billion, a 22% increase from a year ago, driven by higher Permian volumes and 100% ownership of Badlands assets.
Significant Share Repurchases
Targa opportunistically repurchased nearly $215 million worth of common shares so far in 2025, with $125 million repurchased in Q1 at an average price of $191.86 per share.
Strong Financial Position
The company ended Q1 with $2.7 billion of available liquidity and a pro forma consolidated leverage ratio of 3.6x, well within the long-term target range of 3x to 4x.
Permian Basin Volume Growth
Natural gas inlet volumes averaged over 6 billion cubic feet per day, an 11% increase from a year ago, despite winter weather impacts.
Increased Common Dividend
Declared a 33% increase to the common dividend for Q1 2025 relative to 2024.
Negative Updates
Winter Weather Impacts
Volumes were impacted by several winter weather events, which led to a 1% decline in Permian volumes quarter-over-quarter.
Potential Low-Single-Digit Cost Increases
A low-single-digit percentage potential impact on budgeted project costs due to evolving global tariffs, though within contingency plans.
Crude Price Curve Shift
Observed a shift to a lower crude price curve, which may affect future drilling programs.
Company Guidance
During Targa Resources Corp.'s first-quarter 2025 earnings call, the company provided a robust outlook, highlighting several key metrics. Targa achieved record quarterly adjusted EBITDA of $1.179 billion, representing a 22% increase from the previous year, driven by higher Permian volumes and full ownership of its Badlands assets. The company maintained its full-year adjusted EBITDA guidance of $4.65 billion to $4.85 billion. Targa successfully repurchased $215 million worth of common shares and declared a 33% increase in its common dividend for the first quarter. Operationally, Targa's natural gas inlet volumes in the Permian averaged over 6 billion cubic feet per day, an 11% increase from a year ago, despite winter weather impacts. The company forecasts net growth capital spending for 2025 to be between $2.6 billion and $2.8 billion, with net maintenance capital spending estimated at $250 million. Targa's financial position remains strong, with a pro forma consolidated leverage ratio of approximately 3.6x and $2.7 billion of available liquidity. The company continues to focus on maintaining a strong balance sheet, investing in high-return projects, and returning capital to shareholders through dividends and opportunistic share repurchases.

Targa Resources Financial Statement Overview

Summary
Targa Resources demonstrates strong profitability and cash flow metrics, with stable revenue growth and efficient operations. Leverage is a potential risk, with a high debt-to-equity ratio, but the company offsets this with high return on equity and robust cash flow generation. Continued focus on debt management and maintaining operational efficiencies can bolster financial stability.
Income Statement
85
Very Positive
The company shows a solid gross profit margin at 44.27% TTM, indicating efficient control over cost of goods sold. The net profit margin is robust at 8.89% TTM, demonstrating good profitability. Revenue growth is modest at 0.34% over the last year, suggesting stable revenue generation. EBIT and EBITDA margins are healthy at 16.16% and 22.35% TTM, respectively, highlighting strong operational performance.
Balance Sheet
70
Positive
The debt-to-equity ratio is high at 6.61 TTM, indicating significant leverage. However, the equity ratio is low at 10.75% TTM, showing a smaller equity base relative to total assets. Return on equity is impressive at 59.60% TTM, reflecting efficient use of equity to generate profits. The balance sheet stability could be improved by reducing leverage.
Cash Flow
78
Positive
The free cash flow growth rate is strong at 109.37% TTM, indicating improved cash generation. Operating cash flow to net income ratio is favorable at 2.55 TTM, suggesting strong cash-generating operations. Free cash flow to net income ratio is also healthy at 0.98 TTM, showing effective conversion of income into free cash flow. Overall, cash flow metrics are strong, though continued monitoring of capital expenditures is advised.
BreakdownDec 2024Dec 2023Dec 2022Dec 2021Dec 2020
Income Statement
Total Revenue16.38B16.06B20.93B16.95B8.26B
Gross Profit4.26B4.05B2.95B2.35B2.29B
EBITDA4.14B3.97B2.83B1.70B-313.10M
Net Income1.28B1.35B896.80M422.10M-1.32B
Balance Sheet
Total Assets22.73B20.67B19.56B15.21B15.88B
Cash, Cash Equivalents and Short-Term Investments157.30M141.70M219.00M158.50M242.80M
Total Debt14.27B13.01B11.56B6.63B7.80B
Total Liabilities18.32B16.06B14.58B9.28B9.67B
Stockholders Equity2.59B2.74B2.67B2.76B2.96B
Cash Flow
Free Cash Flow683.90M826.20M1.05B1.80B792.90M
Operating Cash Flow3.65B3.21B2.38B2.30B1.74B
Investing Cash Flow-3.02B-2.40B-4.15B-473.20M-738.10M
Financing Cash Flow-612.80M-888.10M1.83B-1.91B-1.09B

Targa Resources Technical Analysis

Technical Analysis Sentiment
Negative
Last Price163.63
Price Trends
50DMA
166.59
Negative
100DMA
170.61
Negative
200DMA
179.22
Negative
Market Momentum
MACD
-1.02
Positive
RSI
44.68
Neutral
STOCH
35.46
Neutral
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For TRGP, the sentiment is Negative. The current price of 163.63 is below the 20-day moving average (MA) of 166.33, below the 50-day MA of 166.59, and below the 200-day MA of 179.22, indicating a bearish trend. The MACD of -1.02 indicates Positive momentum. The RSI at 44.68 is Neutral, neither overbought nor oversold. The STOCH value of 35.46 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for TRGP.

Targa Resources Peers Comparison

Overall Rating
UnderperformOutperform
Sector (63)
Financial Indicators
Name
Overall Rating
Market Cap
P/E Ratio
ROE
Dividend Yield
Revenue Growth
EPS Growth
78
Outperform
$52.93B11.9732.54%7.17%5.53%11.29%
78
Outperform
$49.34B15.4216.04%5.17%40.55%19.24%
75
Outperform
$35.34B29.9446.37%2.14%6.05%11.64%
74
Outperform
$61.05B13.4013.73%7.30%1.04%22.31%
69
Neutral
$14.62B26.2210.09%7.60%3.40%-15.90%
69
Neutral
$62.44B23.068.86%4.13%3.95%11.32%
63
Neutral
₹700.47B32.9213.73%1.90%18.57%36.35%
* Energy Sector Average
Performance Comparison
Ticker
Company Name
Price
Change
% Change
TRGP
Targa Resources
163.63
34.59
26.81%
ET
Energy Transfer
17.73
2.88
19.39%
KMI
Kinder Morgan
28.04
8.26
41.76%
OKE
Oneok
75.70
-2.91
-3.70%
MPLX
MPLX
50.86
12.40
32.24%
PAGP
Plains GP Holdings
19.19
2.13
12.49%

Targa Resources Corporate Events

Private Placements and FinancingBusiness Operations and Strategy
Targa Resources Extends Receivables Agreement to 2026
Neutral
Jul 28, 2025

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.

The most recent analyst rating on (TRGP) stock is a Hold with a $208.00 price target. To see the full list of analyst forecasts on Targa Resources stock, see the TRGP Stock Forecast page.

Private Placements and FinancingBusiness Operations and Strategy
Targa Resources Completes $1.5 Billion Senior Notes Offering
Positive
Jun 18, 2025

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.

The most recent analyst rating on (TRGP) stock is a Hold with a $208.00 price target. To see the full list of analyst forecasts on Targa Resources stock, see the TRGP Stock Forecast page.

Private Placements and FinancingBusiness Operations and Strategy
Targa Resources Announces $1.5 Billion Senior Notes Offering
Neutral
Jun 6, 2025

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.

The most recent analyst rating on (TRGP) stock is a Buy with a $147.00 price target. To see the full list of analyst forecasts on Targa Resources stock, see the TRGP Stock Forecast page.

Executive/Board ChangesShareholder Meetings
Targa Resources Stockholders Re-Elect Directors at Annual Meeting
Neutral
May 21, 2025

At Targa Resources Corp.’s 2025 Annual Meeting of Stockholders held on May 20, 2025, stockholders voted on several key proposals. Four Class III Directors were re-elected to the Board for terms expiring in 2028, PricewaterhouseCoopers LLP was ratified as the company’s independent auditors for 2025, and the compensation of the company’s named executive officers for the fiscal year 2024 was approved on an advisory basis.

The most recent analyst rating on (TRGP) stock is a Hold with a $208.00 price target. To see the full list of analyst forecasts on Targa Resources stock, see the TRGP 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.Date of analysis: Aug 02, 2025