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Investing.com - Goldman Sachs has lowered its price target on Targa Resources (NYSE:TRGP) to $188.00 from $194.00 while maintaining a Buy rating ahead of the company’s second-quarter 2025 earnings report. Currently trading at $170.69, the stock has delivered a strong 31% return over the past year. According to InvestingPro data, analyst consensus remains highly bullish with targets ranging from $157 to $244.
The investment bank expects Targa to report second-quarter EBITDA of $1,130 million, approximately 2% below the consensus estimate of $1,157 million. This projection represents a slight decrease from Goldman’s previous estimate of $1,139 million, primarily due to lower mark-to-market commodity prices. For context, Targa’s last twelve months EBITDA stands at $4.06 billion, with the company maintaining consistent dividend payments for 15 consecutive years - one of several key metrics available on InvestingPro.
Goldman Sachs anticipates the second quarter will be relatively quiet for Targa before higher growth resumes in the second half of 2025. Sequential drivers for the quarter include recovery from negative weather impacts experienced in the first quarter and the completion of planned fractionation maintenance that largely occurred earlier in the year.
The firm expects Targa will firmly reiterate its 2025 guidance during the upcoming earnings report. Key focus areas for the earnings season include Permian activity levels, particularly looking into 2026, any lingering NGL export volatility impacts, and opportunities to acquire third-party volumes.
Goldman’s reduced price target stems from a lowered outlook for the Permian Basin, which has slightly decreased the firm’s EBITDA estimates for Targa, though these estimates remain approximately 1% below consensus forecasts.
In other recent news, Targa Resources reported its Q1 2025 earnings, exceeding expectations with an earnings per share (EPS) of $1.97, slightly above the forecast of $1.95. However, the company faced challenges as its revenue came in at $4.65 billion, missing the anticipated $4.93 billion. Despite this revenue shortfall, Targa demonstrated strong operational performance with a 22% year-over-year increase in adjusted EBITDA. The company also announced a $1.5 billion senior notes offering, which includes two tranches due in 2030 and 2036, intended to refinance existing debt and fund general corporate purposes.
In analyst updates, RBC Capital raised its price target for Targa Resources to $205, maintaining an Outperform rating, citing the company’s strong fundamentals and ability to return cash to shareholders. Conversely, Stifel revised its price target down to $216 from $229 but maintained a Buy rating, noting confidence in Targa’s strategic positioning and resilience. Meanwhile, TD Cowen initiated coverage with a Hold rating, highlighting Targa’s robust growth outlook but limited upside potential at current stock levels.
These developments reflect Targa’s ongoing efforts to navigate economic challenges while pursuing strategic growth and capital return initiatives.
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