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Investing.com - NRG Energy (NYSE:NRG) has been added to RayJa’s Analyst Current Favorites list, while Targa Resources (NYSE:TRGP) has been removed, according to an analyst note released Thursday. According to InvestingPro data, Targa Resources currently maintains a strong "Buy" consensus among analysts, with an average price target suggesting 23% upside potential.
The firm cited a compelling entry point for NRG Energy following a 13-14% stock drop after second-quarter 2025 results. RayJa attributed the selloff to crowded positioning, results slightly below expectations, and misunderstandings about guidance and new deal terms.
NRG Energy blends one of the largest U.S. retail electricity operations with a competitive thermal fleet, which will be enhanced by the pending LS Power deal. The firm noted this acquisition flips the narrative of NRG being net short power and accelerates the company’s long-term adjusted EPS CAGR from 10% to 14%.
Despite strong multi-year performance, NRG trades at approximately 7x 2027E EV/EBITDA as of August 6, 2025, well below the independent power producer median of about 11x. The company also has approximately $1.3 billion in committed 2025 share repurchases. Meanwhile, Targa Resources trades at an EV/EBITDA of 12.7x, with InvestingPro analysis indicating the stock is fairly valued based on its proprietary Fair Value model.
Targa Resources was removed from the list but remains one of RayJa’s top picks in the midstream group, with the firm maintaining its Strong Buy rating on the stock. InvestingPro data reveals that TRGP has maintained dividend payments for 15 consecutive years and recently doubled its dividend, demonstrating strong financial health with an overall score of "GOOD". Get access to over 10 additional exclusive ProTips and comprehensive analysis in the Pro Research Report.
In other recent news, Targa Resources Corp. reported significant financial results for the second quarter of 2025. The company announced a net income of $629.1 million, more than doubling from $298.5 million in the same period last year. This increase was attributed to record transportation volumes in the Permian Basin and natural gas liquids (NGL). Additionally, Targa Resources saw an 18% year-over-year rise in adjusted EBITDA, reaching $1.16 billion. In conjunction with these earnings, the company has decided to raise its capital spending, citing early project completions as a contributing factor. These developments highlight the company’s strong financial performance and strategic investments in ongoing projects.
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