Targa Resources (TRGP) AI Stock Analysis

• Market Cap: $49.81B
• Dividend Yield: 2.03%
• Average Volume (3M): 1.34M
• Price to Earnings (P/E): 27.3
• 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): 2.53
• Shares Outstanding: 214,951,800
• 10 Day Avg. Volume: 1,517,725
• 30 Day Avg. Volume: 1,337,855
• PEG Ratio: 0.45
• Price to Book (P/B): 12.93
• Price to Sales (P/S): 2.31
• P/FCF Ratio: 67.91
• Enterprise Value/Market Cap: 1.34
• Enterprise Value/Revenue: 3.90
• Enterprise Value/Gross Profit: 14.71
• Enterprise Value/Ebitda: 13.77
• 1Y Price Target: $240.20
• Price Target Upside: 3.66% Upside
• Rating Consensus: Strong Buy
• Number of Analyst Covering: 10
• EPS Forecast (FY): 9.93
• Revenue Forecast (FY): $22.79B

• Rating: 68 Neutral
• Price Target: $244.00 ▲(5.30% Upside)
• Action: Downgraded Date: 02/20/26
• Date: Action: Downgraded 02/20/26

The score is driven primarily by strong operational/earnings momentum and a positive forward outlook (EBITDA growth guidance, expanding Permian footprint, and mostly fee-based/hedged cash flows). Offsetting this are meaningful leverage risk on the balance sheet, technically overbought signals that raise near-term pullback risk, and a relatively high P/E with only a modest dividend yield.

Positive Factors

High fee-based cash flows & hedging

A predominantly fee-based revenue mix with multi-year hedges materially reduces commodity sensitivity, improving cash flow predictability. That durability supports multi-year capex funding, consistent dividends/share repurchases, and limits EBITDA volatility from price swings, aiding strategic planning.

Improved profitability and cash generation

Sustained margin expansion and recovery to strong operating cash flow provide a structural improvement in earnings quality. Higher EBITDA margins and FCF coverage strengthen internal funding capacity for growth projects and shareholder returns, and create buffer to support deleveraging when sustained.

Scale in Permian & visible growth backlog

Meaningful Permian scale plus a pipeline of processing, fractionation and export projects creates durable market access and capture of producer volumes. Backloged capacity additions increase long-term throughput, reinforce tariff revenue, and deepen competitive moat across the NGL value chain.

Negative Factors

High leverage and thin equity cushion

Very elevated leverage limits financial flexibility and increases vulnerability to rate moves or cyclical downturns. Despite strong ROE, a small equity base means shocks or project delays could strain covenants or credit metrics, forcing slower buybacks, higher refinancing costs, or asset sales.

Elevated near-term capex and deferred downstream payback

A materially higher capex profile compresses near-term free cash flow and delays material downstream EBITDA benefits until 2H 2027. This increases financing needs and execution exposure over the next 18–24 months, complicating deleveraging and constraining capital returns until projects ramp.

Waha basis volatility and volume disruption risk

Continued regional basis volatility can cause producer shut‑ins and uneven throughput, reducing utilization-sensitive fee revenue and marketing opportunities. Even with hedges, prolonged localized price dislocations create operational uncertainty that can depress midstream volumes and near-term cash generation.

Targa Resources Business Overview & Revenue Model

Company Description

Targa Resources Corp., together with its subsidiary, Targa Resources Partners LP, owns, operates, acquires, and develops a portfolio of midstream energy assets in North America. The company operates in two segments, Gathering and Processing, and Logistics and Transportation. It engages in gathering, compressing, treating, processing, transporting, and selling natural gas; storing, fractionating, treating, transporting, and selling natural gas liquids (NGL) and NGL products, including services to liquefied petroleum gas exporters; and gathering, storing, terminaling, purchasing, and selling crude oil. The company is also involved in the purchase and resale of NGL products; and wholesale of propane, as well as provision of related logistics services to multi-state retailers, independent retailers, and other end-users. In addition, it offers NGL balancing services; and transportation services to refineries and petrochemical companies in the Gulf Coast area, as well as purchases, markets, and resells natural gas. The company operates approximately 28,400 miles of natural gas pipelines, including 42 owned and operated processing plants; and owns or operates a total of 34 storage wells with a gross storage capacity of approximately 76 million barrels. As of December 31, 2021, it leased and managed approximately 648 railcars; 119 transport tractors; and two company-owned pressurized NGL barges. The company was incorporated in 2005 and is headquartered in Houston, Texas.

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

Strong profitability recovery and margin expansion (2025 net income ~$1.84B; EBITDA margin ~28.4%) with solid operating cash flow (~$3.92B) and improved free-cash-flow coverage in 2025. The primary drag is balance-sheet risk: very high leverage (debt-to-equity ~5.7x; total debt ~$17.4B) plus uneven revenue/FCF trends.

Income Statement

Profitability has strengthened meaningfully over the last several years: net income improved from a large loss in 2020 to $1.84B in 2025, with net margin rising to ~10.8% and EBITDA margin to ~28.4% (2025). Margin expansion is a clear positive versus 2021–2022 levels. The key weakness is uneven top-line momentum—revenue declined ~2% in 2025 after modest growth in 2024, following prior volatility—suggesting earnings quality is more driven by mix/pricing/efficiency than consistent volume-led growth.

Balance Sheet

Leverage is the central constraint. Total debt increased to ~$17.4B in 2025, and debt remains very high versus equity (debt-to-equity ~5.7x), leaving the capital structure sensitive to rate/credit conditions and industry downturns. Offsetting this, returns on equity are very strong in 2024–2025 (roughly ~49% to ~60%), reflecting improved profitability, but the elevated leverage and comparatively modest equity base reduce balance-sheet flexibility.

Cash Flow

Cash generation is solid and improving: operating cash flow rose to ~$3.92B in 2025 (from ~$2.30B in 2021). Cash flow covered net income well in 2025 (free cash flow approximately equal to net income), a notable improvement from 2023–2024 when free cash flow was meaningfully lower than net income. The main watch-out is volatility in free cash flow (declines in 2022–2024 before the sharp rebound in 2025), which can complicate deleveraging and capital return consistency.

Breakdown	Dec 2025	Dec 2024	Dec 2023	Dec 2022	Dec 2021
Income Statement
Total Revenue	17.14B	16.63B	15.62B	21.68B	17.44B
Gross Profit	4.54B	3.33B	2.54B	2.79B	2.09B
EBITDA	4.85B	4.14B	3.97B	3.21B	1.70B
Net Income	1.84B	1.27B	828.20M	1.14B	71.20M
Balance Sheet
Total Assets	25.22B	22.73B	20.67B	19.56B	15.21B
Cash, Cash Equivalents and Short-Term Investments	166.10M	157.30M	141.70M	219.00M	158.50M
Total Debt	17.43B	14.27B	13.01B	11.56B	6.63B
Total Liabilities	22.02B	18.32B	16.06B	14.58B	10.03B
Stockholders Equity	3.07B	2.59B	2.74B	2.67B	2.01B
Cash Flow
Free Cash Flow	584.10M	683.90M	826.20M	1.05B	1.80B
Operating Cash Flow	3.92B	3.65B	3.21B	2.38B	2.30B
Investing Cash Flow	-5.44B	-3.02B	-2.40B	-4.15B	-473.20M
Financing Cash Flow	1.53B	-612.80M	-888.10M	1.83B	-1.91B

Targa Resources Technical Analysis

• Technical Analysis Sentiment: Positive
• Last Price: 231.72
• 50DMA: Positive
• 100DMA: Positive
• 200DMA: Positive
• MACD: Negative
• RSI: Negative
• STOCH: Negative

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 231.72 is above the 20-day moving average (MA) of 214.46, above the 50-day MA of 195.00, and above the 200-day MA of 171.46, indicating a bullish trend. The MACD of 11.16 indicates Negative momentum. The RSI at 78.44 is Negative, neither overbought nor oversold. The STOCH value of 91.72 is Negative, 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	80 Outperform	$59.89B	12.20	34.70%	7.31%	5.19%	11.09%
OKE	75 Outperform	$52.16B	16.11	17.17%	5.61%	58.76%	13.74%
LNG	71 Outperform	$47.56B	12.42	67.52%	1.07%	17.12%	14.58%
EPD	70 Outperform	$78.51B	13.69	―	6.72%	-6.46%	-0.87%
TRGP	68 Neutral	$49.81B	27.31	65.06%	2.03%	7.79%	33.93%
DKL	66 Neutral	$2.87B	17.31	―	9.78%	-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 Posts Record 2025 Results, Hikes Dividend

Targa Resources reported record results for the fourth quarter and full year 2025, with net income rising to $545 million for the quarter and $1.923 billion for the year, and adjusted EBITDA climbing 20 percent year-on-year to $4.96 billion on surging Permian, NGL transportation, fractionation and LPG export volumes. In 2025 the company repurchased $642 million of common stock, paid a $1.00 per share fourth-quarter dividend on February 13, 2026, completed its Bull Moose II plant and two bolt-on Permian deals, and on January 6, 2026 closed the $1.25 billion Stakeholder Midstream acquisition, while maintaining about $4.1 billion of year-end liquidity and refinancing higher-cost notes with new longer-dated debt.

To support continued growth, Targa is advancing a large slate of Permian and Gulf Coast projects, including multiple new gas processing plants, expansions of NGL pipelines, LPG export capacity, and a newly announced Train 13 fractionator at Mont Belvieu scheduled for early 2028. For 2026, the company projects adjusted EBITDA of $5.4 billion to $5.6 billion and about $4.5 billion in net growth capital spending, expects record volumes across its Permian and NGL systems, and plans to recommend a 25 percent increase in the annual common dividend to $5.00 per share, signaling confidence in its cash flow growth and reinforcing returns to shareholders.

The most recent analyst rating on (TRGP) stock is a Buy with a $231.00 price target. To see the full list of analyst forecasts on Targa Resources stock, see the TRGP Stock Forecast page.