Targa Resources (TRGP) AI Stock Analysis

• Market Cap: $37.64B
• Dividend Yield: 2.31%
• Average Volume (3M): 1.83M
• Price to Earnings (P/E): 31.9
• Beta (1Y): 0.84
• Revenue Growth: 6.05%
• EPS Growth: 11.64%
• Country: US
• Employees: 3,370
• Sector: Energy
• Sector Strength: 53
• Industry: Oil & Gas Midstream
• EPS (TTM): 0.92
• Shares Outstanding: 216,931,850
• 10 Day Avg. Volume: 1,853,860
• 30 Day Avg. Volume: 1,829,315
• PEG Ratio: -5.15
• Price to Book (P/B): 15.17
• Price to Sales (P/S): 0.00
• P/FCF Ratio: 57.89
• Enterprise Value/Market Cap: 1.41
• Enterprise Value/Revenue: 0.81
• Enterprise Value/Gross Profit: 14.53
• Enterprise Value/Ebitda: 3.32
• 1Y Price Target: $204.07
• Price Target Upside: 17.61% Upside
• Rating Consensus: Strong Buy
• Number of Analyst Covering: 15

• Rating: 78 Outperform
• Price Target: $194.00 ▲(11.80%Upside)

Targa Resources' strong earnings performance and effective financial strategies contribute significantly to its overall score. While the company faces a high leverage risk, its robust profitability, cash flow, and positive technical indicators support a favorable outlook. The high P/E ratio suggests potential overvaluation, but the increased dividend and strategic debt management are key positives.

Positive Factors

Growth and Development

TRGP is seen as one of the fastest growing midstream names with the ability to return over 40% of cash flows via dividends and buybacks.

Project Expansion

Targa announced 3 new growth projects, including expansions in the Delaware Basin and LPG export capacity.

Strategic Transactions

The Blackstone transaction is considered a positive move, resulting in reduced cash payments compared to previous arrangements.

Negative Factors

Cash Flow Issues

Free cash flow after dividends was negative for both the quarter and the year due to higher capital expenditures.

Stock Buybacks

Stock buybacks in Q1 were below estimate.

Valuation and Growth Concerns

Valuation has been trimmed to reflect slower Permian Basin growth in response to lower commodity prices.

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 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 Financial Statement Overview

Summary

Targa Resources demonstrates strong profitability with robust cash flow metrics and stable revenue growth. However, the high debt-to-equity ratio poses a leverage risk, although offset by an impressive return on equity and effective cash generation.

Income Statement

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

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

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.

Breakdown	TTM	Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Income Statement
Total Revenue	16.44B	16.38B	16.06B	20.93B	16.95B	8.26B
Gross Profit	3.65B	4.26B	4.05B	2.95B	2.35B	2.29B
EBITDA	4.06B	4.14B	3.97B	2.83B	1.70B	-313.10M
Net Income	1.31B	1.28B	1.35B	896.80M	422.10M	-1.32B
Balance Sheet
Total Assets	22.80B	22.73B	20.67B	19.56B	15.21B	15.88B
Cash, Cash Equivalents and Short-Term Investments	151.40M	157.30M	141.70M	219.00M	158.50M	242.80M
Total Debt	16.21B	14.27B	13.01B	11.56B	6.63B	7.80B
Total Liabilities	20.23B	18.32B	16.06B	14.58B	9.28B	9.67B
Stockholders Equity	2.45B	2.59B	2.74B	2.67B	2.76B	2.96B
Cash Flow
Free Cash Flow	639.50M	683.90M	826.20M	1.05B	1.80B	792.90M
Operating Cash Flow	3.73B	3.65B	3.21B	2.38B	2.30B	1.74B
Investing Cash Flow	-3.15B	-3.02B	-2.40B	-4.15B	-473.20M	-738.10M
Financing Cash Flow	-536.70M	-612.80M	-888.10M	1.83B	-1.91B	-1.09B

Targa Resources Technical Analysis

• Technical Analysis Sentiment: Positive
• Last Price: 173.52
• 50DMA: Positive
• 100DMA: Negative
• 200DMA: Negative
• 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 173.52 is above the 20-day moving average (MA) of 170.03, above the 50-day MA of 166.74, and below the 200-day MA of 178.71, indicating a neutral trend. The MACD of 2.09 indicates Negative momentum. The RSI at 56.22 is Neutral, neither overbought nor oversold. The STOCH value of 76.30 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	81 Outperform	$51.31B	16.04	16.04%	5.01%	40.55%	19.24%
MPLX	81 Outperform	$52.10B	11.78	32.54%	7.50%	5.53%	11.29%
ET	79 Outperform	$61.67B	13.53	13.73%	7.29%	1.04%	22.31%
TRGP	78 Outperform	$37.64B	31.88	46.37%	2.31%	6.05%	11.64%
KMI	73 Outperform	$63.13B	24.56	8.43%	4.12%	2.02%	5.40%
PAGP	69 Neutral	$14.85B	26.62	10.09%	7.78%	3.40%	-15.90%
Sector *	68 Neutral	$15.14B	9.95	6.38%	5.21%	4.16%	-67.19%

Targa Resources Corporate Events

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.

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.

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.

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.

Targa Resources Stockholders Re-Elect Directors at Annual Meeting

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.

Targa Resources Reports Record Q1 2025 EBITDA

Targa Resources reported a record first quarter 2025 adjusted EBITDA of $1.2 billion, marking a 22% increase from the previous year, despite a slight decrease in net income. The company declared a 33% increase in its annual dividend and repurchased $214 million in common shares. Targa’s operations were impacted by winter weather, affecting volumes in its Gathering and Processing and Logistics and Transportation systems. However, the company anticipates significant growth in the second half of 2025, with ongoing construction projects expected to enhance capacity and performance.