Targa Resources (TRGP) AI Stock Analysis

• Market Cap: $39.32B
• Dividend Yield: 2.06%
• Average Volume (3M): 1.62M
• Price to Earnings (P/E): 24.6
• Beta (1Y): 0.82
• 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: 1,670,620
• 30 Day Avg. Volume: 1,623,455
• 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: 1.36
• Enterprise Value/Revenue: 3.06
• Enterprise Value/Gross Profit: 13.73
• Enterprise Value/Ebitda: 11.54
• 1Y Price Target: $209.08
• Price Target Upside: 14.68% Upside
• Rating Consensus: Strong Buy
• Number of Analyst Covering: 12
• EPS Forecast (FY): 8.6
• Revenue Forecast (FY): $17.40B

• Rating: 74 Outperform
• Price Target: $202.00 ▲(10.80% Upside)

Targa Resources' strong financial performance and strategic growth initiatives, highlighted in the earnings call, are the most significant factors driving the score. Technical indicators support a bullish outlook, although high leverage and valuation concerns slightly temper the overall assessment.

Positive Factors

Strategic Acquisitions

The acquisition of Stakeholder Midstream strengthens Targa's position in the Permian Basin, providing additional infrastructure and stable cash flows, which supports long-term growth and operational synergies.

Revenue Growth

Strong revenue growth and record EBITDA indicate robust business performance and market demand, supporting Targa's long-term financial health and competitive position.

Dividend Increase

The proposed dividend increase reflects confidence in cash flow generation and commitment to returning value to shareholders, enhancing investor appeal and long-term stability.

Negative Factors

High Leverage

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

Elevated Capital Spending

Increased capital spending may constrain short-term free cash flow, affecting liquidity and potentially delaying returns on investment, impacting financial stability.

Debt Offering

While refinancing can optimize capital structure, the new debt issuance increases financial obligations, which could limit flexibility and increase interest burden.

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: 182.31
• 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 182.31 is above the 20-day moving average (MA) of 176.03, above the 50-day MA of 165.26, and above the 200-day MA of 167.83, indicating a bullish trend. The MACD of 5.05 indicates Negative momentum. The RSI at 63.23 is Neutral, neither overbought nor oversold. The STOCH value of 77.72 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
OKE	82 Outperform	$46.31B	13.53	17.14%	5.66%	58.76%	13.74%
MPLX	81 Outperform	$55.79B	11.63	34.35%	7.19%	5.19%	11.09%
EPD	76 Outperform	$69.51B	12.16	19.98%	6.69%	-6.46%	-0.87%
TRGP	74 Outperform	$39.32B	24.63	61.18%	2.06%	7.79%	33.93%
LNG	71 Outperform	$40.76B	10.53	67.52%	1.09%	17.12%	14.58%
DKL	66 Neutral	$2.39B	14.49	―	9.90%	-1.78%	9.32%
Sector *	65 Neutral	$15.17B	7.61	4.09%	5.20%	3.87%	-62.32%

Targa Resources Corporate Events

Targa Resources Completes $1.75 Billion Senior Notes Offering

On November 12, 2025, Targa Resources Corp. completed a public offering of $750 million in 4.350% Senior Notes due 2029 and $1 billion in 5.400% Senior Notes due 2036. The proceeds are intended to redeem existing notes and support general corporate purposes, including debt repayment and capital expenditures, potentially impacting the company’s financial flexibility and market positioning.

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.

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.