One-glance verdict
Overvalued
$6.22 our estimate vs market $294.90
Wall Street consensus: $327.86 (5,171.4% higher than our fair-value estimate)
4642% above our estimate, beyond the bull case
Fundamentals snapshot
Targa Resources Corp.
TRGP · NYQ · Energy · Oil & Gas Midstream
Current price
$294.90
52-week range
$149.01 - $307.94
Market cap
$63.24B
Balance sheet
Distressed
3.91x Stretched
Net debt $19.45B. Interest coverage shows how many times profit covers the interest bill.
What stands out
3 Rewards
3 Risks
3 rewards · 3 risks
- Reward Returns 70.8% on equity, ahead of 83% of its peers.
- Reward Free cash flow was positive in 7/10 years.
- Risk Net debt grew 53.0% over 3 years.
- Risk Stock trades 19.4% above its 5-year average P/E.
What this company does
Targa Resources Corp.
Targa Resources Corp. is like a pipeline and storage company for natural gas and oil. They make their money by gathering, processing, and moving these energy products for other companies, which is important because it helps get fuel to where it's needed. Their earnings mainly come from fees for these services, rather than just the price of the oil and gas itself.
How the company got here
Targa Resources Corp. was founded in 2005 and has grown into a significant player in North America's energy infrastructure. The company's journey has involved strategically acquiring and developing assets that are essential for moving and processing natural gas and natural gas liquids (NGLs). This growth has positioned Targa as a key link between energy producers and consumers, handling the critical steps after oil and gas are extracted from the ground.
What it actually does
Targa Resources operates in the midstream sector of the energy industry. Think of them as the crucial middlemen who take raw natural gas and its byproducts from where they are drilled to where they can be used or further processed. This involves gathering these resources, processing them to remove impurities and separate valuable components, and then transporting them to refineries, petrochemical plants, or export terminals.
Gathering and Processing
This segment is all about collecting raw natural gas from wells and preparing it for transport or sale. 'Gathering' involves collecting the gas through a network of pipelines directly from the production sites. 'Processing' then cleans the gas, removing things like water and other contaminants, and separates valuable Natural Gas Liquids (NGLs) such as propane and butane. These NGLs are like the building blocks for many everyday products, from plastics to heating fuels. This is a substantial part of Targa's business, forming the foundation of its operations.
Logistics and Transportation
Once the natural gas and NGLs are processed, this segment focuses on moving them to where they are needed. This includes transporting them via pipelines, trucks, and barges to customers like refineries and petrochemical companies. Targa also plays a role in the sale and marketing of these products, including facilitating exports for liquefied petroleum gas (LPG). This part of the business is vital for connecting the processed energy products to the broader market and is a significant revenue generator for the company.
What management is betting on now
Targa's management is focused on expanding its existing infrastructure and capitalizing on the growing demand for NGLs, both domestically and internationally. They are investing in projects that will increase their capacity to gather and process more natural gas and transport a greater volume of NGLs. This strategy aims to leverage their established network and capture more of the value chain, anticipating continued growth in energy consumption and the need for reliable midstream services.
Price history
How the share price has moved
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Earnings history
Last 8 quarters — what happened
Click any quarter to read the call summary and what the numbers say.
FY2024 Q3
$-287.90M
FY2024 Q4
$601.00M
FY2025 Q1
$162.20M
FY2025 Q2
$-47.80M
FY2025 Q3
$-72.60M
FY2025 Q4
$542.30M
FY2026 Q1
$-160.00M
FY2026 Q2
$431.20M
Revenue
$4.44B
Net income
$764.60M
Diluted EPS
3.54
Operating cash flow
$1.44B
Free cash flow
$431.20M
Fetching…
Sources
Revenue
$4.09B
Net income
$479.60M
Diluted EPS
2.21
Operating cash flow
$739.50M
Free cash flow
$-160.00M
Fetching…
Sources
Revenue
$4.06B
Net income
$545.00M
Diluted EPS
2.51
Operating cash flow
$1.51B
Free cash flow
$542.30M
Fetching…
Sources
Revenue
$4.15B
Net income
$478.40M
Diluted EPS
2.20
Operating cash flow
$599.20M
Free cash flow
$-72.60M
Fetching…
Sources
Revenue
$4.26B
Net income
$629.10M
Diluted EPS
2.87
Operating cash flow
$858.30M
Free cash flow
$-47.80M
Fetching…
Sources
Revenue
$4.56B
Net income
$270.50M
Diluted EPS
0.91
Operating cash flow
$954.40M
Free cash flow
$162.20M
Fetching…
Sources
Revenue
$4.41B
Net income
$350.90M
Diluted EPS
1.44
Operating cash flow
$1.33B
Free cash flow
$601.00M
Fetching…
Sources
Revenue
$3.85B
Net income
$387.40M
Diluted EPS
1.75
Operating cash flow
$540.90M
Free cash flow
$-287.90M
Fetching…
Sources
Is it cheap or expensive?
Fair value $6.22 vs current price $294.90
Wall Street consensus is the average analyst price target: $327.86 (5,171.4% higher than our fair-value estimate).
Our most-likely fair value is $6.22 a share — about 97.9% below today's price of $294.90, so the stock currently looks expensive (overvalued).
Is it drowning in debt?
Distressed
Net debt $19.4B. Interest coverage 3.9x.
Net debt
$19.45B
Interest coverage
3.91x
Targa Resources Corp.'s profit covers its interest bill about 3.9 times over. which is stronger than every peer shown here.
Distressed
Worse cushion
Baseline
Better cushion
TRGP
BASELINE
Targa Resources Corp.
Total debt $19.58B Interest coverage 3.91x This is the baseline the peer rows are being compared against.
Total debt $79.37B Interest coverage 2.31x -41% vs TRGP Carries about 1.7x less debt cushion than TRGP.
Total debt $32.43B Interest coverage 2.62x -33% vs TRGP Carries about 1.5x less debt cushion than TRGP.
Total debt $70.24B Interest coverage 2.68x -31% vs TRGP Carries about 1.5x less debt cushion than TRGP.
Total debt $30.79B Interest coverage 3.06x -22% vs TRGP Carries about 1.3x less debt cushion than TRGP.
Total debt $8.63B Interest coverage 2.49x -36% vs TRGP Carries about 1.6x less debt cushion than TRGP.
What you should know
The case for and against TRGP
3 Rewards
3 Risks
Rewards
-
Returns 70.8% on equity, ahead of 83% of its peers.
-
Free cash flow was positive in 7/10 years.
-
Dividend yield is 1.7% with 16-year payout history.
Risks
-
Net debt grew 53.0% over 3 years.
-
Stock trades 19.4% above its 5-year average P/E.
-
Insider ownership is only 1.4% (peer median: 10.3%).
The numbers
All the key metrics, grouped by purpose
Tap any ? icon to learn what it means.
Valuation
How expensive the stock looks
P/E (TTM)
28.19x
Forward P/E
24.53x
P/B
17.29x
P/S
3.78x
EV/EBITDA
15.06x
PEG ratio
1.25x
Profitability
How much profit each dollar creates
Gross margin
43.2%
Operating margin
27.8%
Net margin
13.5%
ROE
70.8%
ROA
9.2%
Health
Liquidity and balance-sheet strength
Debt / equity
5.16x
Current ratio
0.77x
Quick ratio
0.61x
Total debt
$19.58B
Total cash
$132.30M
Growth
How the business has been compounding
Revenue TTM
$16.74B
Revenue 5Y CAGR
0.1%
EPS TTM
10.46
EPS 5Y CAGR
30.5%
Cash flow
How much cash the business throws off
Operating CF TTM
$4.29B
Free CF TTM
$584.10M
FCF margin
3.5%
Dividend
Shareholder payout
Yield
1.7%
Payout ratio
40.6%
Last ex-div date
2026-10-30