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Investing.com - RBC Capital has raised its price target on Targa Resources (NYSE:TRGP) to $218.00 from $213.00 while maintaining an Outperform rating on the stock. The new target represents potential upside from the current price of $171.80, though still below the highest analyst target of $261. InvestingPro data shows Targa trading at a PEG ratio of 0.67, indicating a low P/E relative to growth.
The adjustment follows Targa Resources’ planned bolt-on acquisition of Stakeholder Midstream, which RBC Capital views favorably due to the attractive acquisition multiple of approximately 6x 2026 unlevered adjusted free cash flow.
RBC Capital noted that the acquisition meets Targa’s high return threshold for acquisitions and brings complementary assets around the company’s existing footprint.
The firm also highlighted that the acquired assets are expected to deliver stable to modestly growing volumes, contributing positively to Targa’s operations.
The price target increase reflects RBC’s higher estimates for Targa Resources, partially offset by higher debt resulting from the acquisition transaction. Despite debt concerns, InvestingPro rates Targa’s overall financial health as "GOOD" with a 2.72 score. The company has maintained dividend payments for 15 consecutive years with impressive 33.33% dividend growth. Discover more insights in Targa’s Pro Research Report, available with over 1,400 US equities on InvestingPro.
In other recent news, Targa Resources reported its third-quarter 2025 earnings, surpassing analysts’ expectations with an EPS of $2.13, compared to the forecasted $2.11. Despite a revenue miss, the company’s strategic initiatives seem to have bolstered investor confidence. Targa Resources also announced a definitive agreement to acquire Stakeholder Midstream for $1.25 billion in cash. This acquisition will expand its operations in the Permian Basin and includes natural gas pipelines, processing capacity, and carbon capture activities.
UBS has reiterated a Buy rating for Targa Resources, setting a price target of $228.00 following the acquisition announcement. Additionally, RBC Capital has raised its price target for the company to $213.00, maintaining an Outperform rating, citing strong third-quarter performance and potential for exceeding adjusted EBITDA guidance. In a related development, Targa Resources priced a $1.75 billion public offering of senior notes, expected to close on November 12, 2025. These recent developments highlight the company’s ongoing strategic growth initiatives and financial activities.
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