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Investing.com - Targa Resources (NYSE:TRGP) stock rose after UBS reiterated a Buy rating with a $228.00 price target following the company’s announcement of a $1.25 billion acquisition. The midstream energy company, currently valued at $37.93 billion, trades at a P/E ratio of 24.04, which InvestingPro data shows is low relative to its near-term earnings growth.
The midstream energy company plans to acquire Stakeholder Midstream in an all-cash transaction valued at approximately six times the target’s expected 2026 unlevered adjusted free cash flow, according to UBS. Analysts maintain a strong consensus recommendation on Targa, with price targets ranging from $188 to $261.
Stakeholder Midstream’s assets include approximately 480 miles of natural gas pipelines, 180 MMcf/d of cryogenic natural gas processing and sour treating capacity, carbon capture activities generating 45Q tax credits, and a small crude oil gathering system in the Permian Basin.
The acquisition target’s operations are supported by long-term, fee-based contracts across approximately 170,000 dedicated acres, which will supplement Targa’s existing treating and carbon capture footprint within the Permian Basin.
Targa Resources expects to maintain its long-term leverage target range of 3.0-4.0x following the transaction, which is anticipated to close in the first quarter of 2026.
In other recent news, Targa Resources Corp. announced its third-quarter 2025 earnings results, reporting an earnings per share (EPS) of $2.13, which exceeded analysts’ expectations of $2.11. Despite a revenue miss, the company remains optimistic about its strategic initiatives. Additionally, Targa Resources has entered into a definitive agreement to acquire Stakeholder Midstream, LLC for $1.25 billion in cash, which will expand its operations in the Permian Basin. This acquisition includes significant natural gas pipelines, processing capacity, and carbon capture activities.
RBC Capital has responded to Targa Resources’ strong third-quarter performance by raising its stock price target to $213, maintaining an Outperform rating. The firm suggests that the company’s expected high-end performance of its 2025 Adjusted EBITDA guidance could be conservative. Furthermore, Targa Resources has announced the pricing of a $1.75 billion public offering of senior notes, split into two tranches due in 2029 and 2036. The offering is anticipated to close on November 12, 2025, subject to customary conditions. These developments highlight Targa Resources’ ongoing efforts to strengthen its financial position and expand its operations.
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