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On Thursday, Stifel analysts revised their price target for Targa Resources (NYSE:TRGP) shares, decreasing it to $216 from the previous $229, while still endorsing the stock with a Buy rating. The adjustment follows Targa Resources’ first quarter 2025 earnings report, which met analysts’ forecasts and affirmed the company’s EBITDA guidance for the year. According to InvestingPro data, the company maintains a "GOOD" overall financial health score, with analyst targets ranging from $157 to $259, reflecting mixed sentiment about the stock’s current valuation.
Targa Resources has been navigating a challenging economic and commodity landscape without witnessing significant alterations in its customer base’s drilling plans for 2025 and 2026. The company’s management has expressed confidence in the resilience of its operations, citing a reliable customer base, strategic acreage commitments, an integrated operational footprint, a solid financial standing, consistent fee-based earnings, and effective hedging strategies as pillars for its positive outlook.
In addition to its operational stability, Targa Resources is actively pursuing a return of capital strategy. This approach has recently led to a substantial 33% increase in the company’s dividend, alongside a strategic share repurchase program that has been implemented year to date. InvestingPro analysis reveals the company has maintained dividend payments for 15 consecutive years, with a current yield of 2.34%. Subscribers can access 10+ additional ProTips and comprehensive financial metrics in the Pro Research Report.
Targa’s management also highlighted that even in a scenario where Permian crude oil production levels off, the company expects natural gas production, which is central to its business model, to continue growing at a rate of 2 to 3%. The new price target of $216 is based on a 12.0x EBITDA multiple, a slight decrease from the previous 12.5x multiple. Despite the reduced price target, Stifel’s analysts maintain a positive stance on Targa Resources’ stock. The company’s strong fundamentals are reflected in its impressive 55% return over the past year and revenue of $16.4 billion in the last twelve months, though current market prices suggest the stock may be trading above its Fair Value.
In other recent news, Targa Resources Inc . reported its Q1 2025 earnings, achieving an earnings per share (EPS) of $1.97, which surpassed analysts’ expectations of $1.95. However, the company’s revenue fell short, recording $4.65 billion compared to the anticipated $4.93 billion. Despite the earnings beat, the revenue shortfall has raised concerns about potential challenges in meeting market demand or pricing pressures. Targa Resources maintained strong operational performance with a 22% year-over-year increase in adjusted EBITDA, reaching $1.179 billion. The company continues to focus on strategic capital projects, with upcoming completions expected to drive growth in the latter half of 2025. Analysts have not upgraded or downgraded the stock in this period. The firm has also been actively engaging in share repurchases, having repurchased nearly $215 million worth of common shares this year. Targa Resources remains confident in its strategic positioning and has reaffirmed its full-year 2025 adjusted EBITDA guidance of $4.65 to $4.85 billion.
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