Targa Resources stock price target raised to $221 at RBC Capital

On Monday, RBC Capital Markets analyst Elvira Scotto adjusted the price target for Targa Resources (NYSE: NYSE:TRGP) stock, increasing it marginally from $220.00 to $221.00 while maintaining an Outperform rating. The stock, currently trading at $203.59, has shown remarkable strength with a 107% return over the past year. Scotto’s decision follows Targa Resources’ recent earnings announcement, which included a projection for 2025 adjusted EBITDA that surpassed previous estimates from Wall Street. According to InvestingPro, the company’s current EBITDA stands at $4.129 billion.

Targa Resources has also revised its capital expenditure forecast upwards in response to growing demand from producers. Although this revised spending plan is expected to delay the company’s shift to positive free cash flow until 2026 according to RBC Capital’s model, Targa Resources anticipates its 2025 debt leverage to be close to the midpoint of its long-term target. With a market capitalization of $44.4 billion and an overall Financial Health Score of "GOOD" from InvestingPro, the company maintains a solid financial foundation despite its ambitious growth plans.

Scotto believes that the increased investment in growth will lead to higher long-term returns for shareholders. The analyst’s outlook for Targa Resources remains positive, as reflected in the maintained Outperform rating and the slightly increased price target.

Targa Resources has been actively responding to the market’s needs, with its updated guidance indicating confidence in its financial strategy and operational performance. The company’s focus on meeting producer demand while keeping an eye on long-term financial goals seems to be resonating with analysts at RBC Capital Markets, as evidenced by the latest price target adjustment.

In other recent news, Targa Resources has seen a series of analyst updates and strategic developments. Citi analysts have raised the price target for Targa Resources to $227, citing rapid infrastructure development and new growth initiatives, such as a new intra-basin pipeline and expanded LPG export capabilities. Stifel also increased the price target to $229 following Targa’s strong fourth-quarter 2024 earnings, which exceeded expectations, though concerns about higher capital expenditures were noted. Mizuho (NYSE:MFG) Securities adjusted their price target to $226, reflecting the company’s robust performance and growth prospects in the Permian Basin.

CFRA analyst Stewart Glickman raised the price target to $208, maintaining a Hold rating, and noted an increase in projected earnings per share for 2025. Targa Resources reported a Q4 operating EPS of $1.82, slightly below consensus estimates, but the company expects a reduction in capital expenditures in 2025. Additionally, Targa Resources announced the appointment of Jennifer R. Kneale as President, effective March 2025, transitioning from her current role as President – Finance and Administration. This leadership change comes during a period of strategic growth and development for the company.

Analysts have highlighted Targa Resources’ potential for future growth, with Citi projecting a 5-year EBITDA CAGR of 10% and an EPS CAGR of 18%. Despite the positive outlook, some analysts, like those from CFRA, caution that the current trading price already reflects much of the potential upside. Investors are closely watching Targa Resources’ strategic initiatives and leadership changes for indications of future performance.

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