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Investing.com - RBC Capital raised its price target on Targa Resources (NYSE:TRGP) to $205.00 from $191.00 on Thursday, while maintaining an Outperform rating on the stock. The new target represents a potential 20% upside from the current price of $170.49, with analyst targets ranging from $157 to $244.
The price target increase follows investor meetings with Targa’s leadership team, including President Jennifer Kneale, President of Logistics & Transportation Scott Pryor, and VP of IR and Fundamentals Tristan Richardson.
RBC Capital noted it came away "incrementally more positive" on Targa Resources after the meetings and believes a disconnect exists between the current stock price and the company’s strong fundamentals.
The firm specifically highlighted Targa’s "ability to return cash to shareholders" as a key factor in its continued bullish outlook on the stock. InvestingPro analysis shows the company has maintained dividend payments for 15 consecutive years, with a current dividend yield of 2.35% and impressive 100% dividend growth in the last twelve months.
RBC Capital also increased its 2026 estimates for Targa Resources, citing expectations for higher volumes as the basis for both the revised forecasts and the higher price target. The company has shown steady growth with revenue CAGR of 14% over the past five years, while maintaining a strong EBITDA of $4.06 billion in the last twelve months. Get access to 8 more exclusive InvestingPro Tips and comprehensive analysis in the Pro Research Report.
In other recent news, Targa Resources reported its first-quarter 2025 earnings, surpassing expectations with an earnings per share of $1.97 compared to the forecasted $1.95. However, the company faced a revenue shortfall, with reported revenues of $4.65 billion falling below the anticipated $4.93 billion. Targa Resources demonstrated strong operational performance, evidenced by a 22% year-over-year increase in adjusted EBITDA to $1.179 billion. In a strategic financial move, Targa Resources priced a $1.5 billion senior notes offering, with proceeds intended for debt redemption and general corporate purposes. Stifel analysts recently adjusted their price target for Targa Resources to $216 from $229, maintaining a Buy rating, reflecting confidence in the company’s resilience amid economic challenges. The company continues to pursue a return of capital strategy, marked by a 33% increase in dividends and a strategic share repurchase program. Targa Resources has also reaffirmed its full-year 2025 adjusted EBITDA guidance of $4.65 to $4.85 billion, with expectations of volume growth driven by strategic capital projects. These developments highlight Targa’s ongoing efforts to navigate a challenging economic landscape while maintaining a solid financial position.
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