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On Tuesday, Truist Securities analyst Neal Dingmann increased the price target for Targa Resources (NYSE:TRGP) shares to $235.00, up from the previous $220.00, while reiterating a Buy rating on the stock. The company’s stock has shown remarkable momentum, delivering an 86.86% return over the past year and an impressive 8.5% gain just last week. According to InvestingPro data, the stock currently trades at a P/E ratio of 34.05, with a market capitalization of $42.96 billion.
Dingmann’s adjustment reflects his confidence in Targa’s extensive expansion projects, which are anticipated to significantly enhance the company’s gas processing and natural gas liquids (NGL) transportation, fractionation, and export capacities. The analyst expects these projects to bolster earnings and free cash flow (FCF) in the current and following year. InvestingPro analysis shows the company maintains a GOOD financial health score of 2.7, with analysts forecasting EPS to reach $8.48 in FY2025.
The company is in the process of implementing billions of dollars worth of largely fee-based projects. These endeavors are set to add more than 1.7 billion cubic feet per day (Bcf/d) of gas processing capacity in the Permian Basin and over 1 million barrels per day (MMBbl/d) of NGL transportation and related capacities.
Dingmann believes that Targa Resources will not only likely continue to expedite these projects but also that they will be highly utilized from the outset, which should rapidly enhance the company’s financial results.
The analyst’s statement underscores the expectation for strong growth, "We increase our price target to $235 from $220 and suggest strong continued return of capital." This reflects the analyst’s view that the company’s expansion projects are set to contribute positively to its financial performance and investor returns.
In other recent news, Targa Resources has garnered attention with several key developments. The company recently reported fourth-quarter 2024 earnings that exceeded both Stifel’s expectations and consensus estimates, leading to a positive outlook for 2025. Targa Resources has also announced an increase in its capital expenditure forecast to address rising demand from producers, although this may delay achieving positive free cash flow until 2026, according to RBC Capital. In terms of analyst ratings, RBC Capital has slightly raised its price target for Targa Resources to $221, maintaining an Outperform rating, while Citi increased its price target to $227, citing rapid infrastructure development and a Buy rating. CFRA also adjusted its price target to $208, holding a neutral stance with a Hold rating. Additionally, Stifel has set a new price target of $229, maintaining a Buy rating and highlighting the company’s balance sheet flexibility. Beyond financials, Targa Resources announced the appointment of Jennifer R. Kneale as President, effective March 2025, marking a significant leadership transition. These developments reflect the company’s strategic focus on growth and financial stability, resonating with various analysts.
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