Street Calls of the Week
Investing.com - UBS has reiterated its Buy rating and $228.00 price target on Targa Resources (NYSE:TRGP), citing confidence in the company’s Permian Basin growth outlook. The stock, currently trading at $167.54, has analyst targets ranging from $185 to $240, with a strong consensus recommendation of 1.32 (Strong Buy). According to InvestingPro data, the company maintains a "GOOD" overall financial health score.
The firm noted that Targa has accelerated several projects with expected volume ramps in the second half of 2025. Between the end of the first quarter and July 2025, the company added approximately 520 MMcf/d of capacity, equivalent to almost two gas plants. This expansion aligns with the company’s impressive 14% five-year revenue CAGR and recent 5% year-over-year revenue growth. For deeper insights into Targa’s growth metrics and 10+ additional ProTips, visit InvestingPro.
UBS expressed particular bullishness on Delaware Basin growth opportunities, attributing this to Targa’s larger aerial footprint, more diverse producer base, and less mature infrastructure assets in the region. The company’s strong market position is reflected in its healthy 35.7% gross profit margin and consistent dividend payments, which have increased for three consecutive years.
Several project timelines have been moved up, including Pembrook II (already online versus previous target of fourth quarter 2025), Bull Moose II (fourth quarter 2025 versus second quarter 2026), and Train 11 (second quarter 2026 versus third quarter 2026).
For 2026, Targa plans to focus spending on high-return fee-based projects including gathering and processing growth assets, the Bull Run extension, Forza pipeline, Trains 11 and 12, and intra-Delaware Basin expansion, with the Forza Project expected to provide 750 Dth/d of transportation service with an estimated $200 million capital expenditure.
In other recent news, Targa Resources has announced plans to construct the Speedway NGL Pipeline and a new gas processing plant to support increased production in the Permian Basin. The 500-mile pipeline will transport natural gas liquids to Targa’s fractionation complex in Mont Belvieu, Texas, and is expected to be operational by the third quarter of 2027, with an estimated cost of $1.6 billion. UBS has reiterated its Buy rating for Targa Resources, highlighting the company’s competitive advantages in the Delaware Basin and setting a price target of $228.00. Meanwhile, BMO Capital initiated coverage with an Outperform rating and a price target of $185.00, expressing optimism about Targa’s growth prospects despite a lower rig environment.
Goldman Sachs maintained its Buy rating but lowered its price target slightly to $186.00 following Targa’s better-than-expected second-quarter 2025 earnings report, citing stronger logistics and transportation margins. CFRA raised its price target to $177.00, reflecting strong pipeline volumes and a combination of EV/EBITDA and DCF model analyses. These recent developments indicate a range of analyst perspectives on Targa Resources, with several firms expressing confidence in the company’s future performance.
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