Targa Resources (TRGP) AI Stock Analysis

• Market Cap: $36.53B
• Dividend Yield: 2.2%
• Average Volume (3M): 1.61M
• Price to Earnings (P/E): 22.9
• Beta (1Y): 0.83
• Revenue Growth: 7.79%
• EPS Growth: 33.93%
• Country: US
• Employees: 3,370
• Sector: Energy
• Sector Strength: 52
• Industry: Oil & Gas Midstream
• EPS (TTM): 2.21
• Shares Outstanding: 214,658,570
• 10 Day Avg. Volume: 1,556,333
• 30 Day Avg. Volume: 1,611,006
• PEG Ratio: 0.55
• Price to Book (P/B): 15.16
• Price to Sales (P/S): 2.36
• P/FCF Ratio: 57.47
• Enterprise Value/Market Cap: 1.47
• Enterprise Value/Revenue: 3.06
• Enterprise Value/Gross Profit: 13.73
• Enterprise Value/Ebitda: 11.54
• 1Y Price Target: $208.62
• Price Target Upside: 22.33% Upside
• Rating Consensus: Strong Buy
• Number of Analyst Covering: 13
• EPS Forecast (FY): 8.55
• Revenue Forecast (FY): $17.40B

• Rating: 71 Outperform
• Price Target: $187.00 ▲(9.65% Upside)

Targa Resources' strong earnings call performance and positive technical indicators are significant strengths. However, high leverage and a relatively high P/E ratio pose risks. The company's strategic growth initiatives and dividend increase proposal support long-term growth potential, but short-term challenges remain.

Positive Factors

Revenue Growth

Consistent revenue growth indicates robust demand for Targa's services and strengthens its market position, supporting long-term business sustainability.

Strategic Growth Initiatives

New projects enhance Targa's capacity and market reach, positioning the company for future growth and increased competitive advantage in the industry.

Dividend Increase Proposal

A significant dividend increase reflects management's confidence in cash flow stability and commitment to returning value to shareholders, enhancing investor appeal.

Negative Factors

High Leverage

High leverage can limit financial flexibility and increase risk, potentially impacting Targa's ability to invest in growth or weather economic downturns.

Elevated Capital Spending

Increased capital spending may constrain free cash flow in the short term, affecting Targa's ability to fund other initiatives without increasing debt.

Temporary Production Shut-Ins

While temporary, production shut-ins highlight vulnerability to external factors, which can disrupt operations and affect revenue stability.

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. Headquartered in Houston, Texas, the company operates through two primary segments: the Natural Gas Gathering and Processing segment, which focuses on the collection and processing of natural gas, and the Natural Gas Liquids segment, which is involved in the transportation, fractionation, and marketing of NGLs. Targa's extensive pipeline infrastructure and processing facilities enable it to serve a diverse customer base, including producers, marketers, and industrial end-users.

How the Company Makes Money

Targa Resources generates revenue primarily through its gathering, processing, and transportation of natural gas and NGLs. Key revenue streams include fees collected for gathering natural gas from producers, processing fees for separating natural gas liquids from raw natural gas, and transportation fees for moving these products through its extensive pipeline network. The company also benefits from the sale of NGLs at market prices. Significant partnerships with upstream producers and other midstream companies enhance Targa's earnings by ensuring a steady flow of natural gas and NGLs through its systems. Additionally, Targa's strategic investments in infrastructure and expansion projects contribute to its revenue growth.

Targa Resources Financial Statement Overview

Summary

Targa Resources demonstrates strong revenue growth and profitability, supported by efficient equity utilization. However, high leverage and reliance on debt financing present potential risks. Cash flow metrics show improvement, but the company should focus on enhancing free cash flow relative to net income to ensure long-term financial stability.

Income Statement

Targa Resources shows a strong revenue growth trajectory with a TTM revenue growth rate of 1.84%. The company maintains healthy profitability with a gross profit margin of 20.82% and a net profit margin of 8.82% in the TTM. However, the EBIT and EBITDA margins, while solid, indicate room for improvement in operational efficiency.

Balance Sheet

The balance sheet reflects high leverage with a debt-to-equity ratio of 6.51 in the TTM, which poses a risk. However, the return on equity is robust at 59.74%, indicating efficient use of equity to generate profits. The equity ratio is relatively low, suggesting a reliance on debt financing.

Cash Flow

Cash flow analysis reveals a significant improvement in free cash flow growth at 50.36% in the TTM. The operating cash flow to net income ratio is stable at 1.16, indicating good cash conversion. However, the free cash flow to net income ratio is lower at 11.61%, suggesting potential constraints in free cash flow relative to net income.

Breakdown	TTM	Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Income Statement
Total Revenue	17.49B	16.63B	15.62B	21.68B	17.44B	8.27B
Gross Profit	3.90B	3.33B	2.54B	2.79B	2.09B	1.52B
EBITDA	4.64B	4.14B	3.97B	3.21B	1.70B	-313.10M
Net Income	1.65B	1.27B	828.20M	1.14B	71.20M	-1.55B
Balance Sheet
Total Assets	24.17B	22.73B	20.67B	19.56B	15.21B	15.88B
Cash, Cash Equivalents and Short-Term Investments	223.90M	157.30M	141.70M	219.00M	158.50M	242.80M
Total Debt	17.43B	14.27B	13.01B	11.56B	6.63B	7.80B
Total Liabilities	21.34B	18.32B	16.06B	14.58B	10.03B	9.97B
Stockholders Equity	2.71B	2.59B	2.74B	2.67B	2.01B	2.65B
Cash Flow
Free Cash Flow	642.80M	683.90M	826.20M	1.05B	1.80B	792.90M
Operating Cash Flow	3.74B	3.65B	3.21B	2.38B	2.30B	1.74B
Investing Cash Flow	-3.21B	-3.02B	-2.40B	-4.15B	-473.20M	-738.10M
Financing Cash Flow	-535.40M	-612.80M	-888.10M	1.83B	-1.91B	-1.09B

Targa Resources Technical Analysis

• Technical Analysis Sentiment: Positive
• Last Price: 170.54
• 50DMA: Positive
• 100DMA: Positive
• 200DMA: Positive
• MACD: Negative
• RSI: Neutral
• STOCH: Neutral

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For TRGP, the sentiment is Positive. The current price of 170.54 is above the 20-day moving average (MA) of 163.98, above the 50-day MA of 161.70, and above the 200-day MA of 169.37, indicating a bullish trend. The MACD of 3.62 indicates Negative momentum. The RSI at 59.98 is Neutral, neither overbought nor oversold. The STOCH value of 47.92 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for TRGP.

Targa Resources Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
MPLX	81 Outperform	$54.23B	11.30	34.35%	7.30%	5.19%	11.09%
EPD	74 Outperform	$70.18B	12.28	19.98%	6.66%	-6.46%	-0.87%
OKE	74 Outperform	$43.70B	12.77	17.14%	5.84%	58.76%	13.74%
DKL	73 Outperform	$2.40B	14.52	―	9.99%	-1.78%	9.32%
TRGP	71 Outperform	$36.53B	22.88	61.18%	2.20%	7.79%	33.93%
LNG	67 Neutral	$44.23B	11.43	67.52%	1.00%	17.12%	14.58%
Sector *	65 Neutral	$15.17B	7.61	4.09%	5.20%	3.87%	-62.32%

Targa Resources Corporate Events

Targa Resources Announces $1.75 Billion Senior Notes Offering

On November 6, 2025, Targa Resources Corp. announced the pricing of a $1.75 billion public offering of senior notes, consisting of $750 million in 4.350% Senior Notes due 2029 and $1 billion in 5.400% Senior Notes due 2036. The offering aims to redeem existing 6.875% Senior Notes due 2029 and support general corporate purposes, including debt repayment and funding capital expenditures. The transaction, involving major underwriters like BofA Securities and Citigroup Global Markets, underscores Targa’s strategic financial maneuvers to optimize its capital structure and enhance operational flexibility.

The most recent analyst rating on (TRGP) stock is a Hold with a $192.00 price target. To see the full list of analyst forecasts on Targa Resources stock, see the TRGP Stock Forecast page.

Targa Resources Reports Record Q3 2025 Results

Targa Resources Corp. is a leading provider of midstream services in North America, specializing in the gathering, processing, and transportation of natural gas and natural gas liquids (NGLs). The company operates a diversified portfolio of infrastructure assets crucial for energy delivery across the United States and international markets.

Targa Resources Corp. Earnings Call Highlights Growth and Optimism

The recent earnings call of Targa Resources Corp. was marked by a positive sentiment, driven by strong financial performance and strategic growth initiatives. The company expressed confidence in its long-term growth prospects, despite acknowledging challenges such as temporary production shut-ins and elevated capital spending.

Targa Resources Reports Record Q3 2025 Financial Results

Targa Resources Corp. reported record financial results for the third quarter of 2025, with a net income of $478.4 million and an adjusted EBITDA of $1.3 billion, marking a 19% increase year-over-year. The company announced several growth projects, including new gas plants and pipeline expansions in the Permian Basin, and plans to increase its annual dividend by 25% in 2026, reflecting strong operational performance and strategic expansion efforts.

The most recent analyst rating on (TRGP) stock is a Buy with a $200.00 price target. To see the full list of analyst forecasts on Targa Resources stock, see the TRGP Stock Forecast page.

Targa Resources Shines in Latest Earnings Call

Targa Resources Corp. recently held its earnings call, revealing a generally positive sentiment despite some challenges. The company celebrated record volumes and robust capital returns to shareholders, alongside successful project execution. However, it also acknowledged challenges such as commodity price volatility, operational impacts from planned turnarounds, and increased competition in the Delaware Basin. Despite these hurdles, Targa remains optimistic due to its strong growth trajectories and financial health.