HOUSTON, May 01, 2025 (GLOBE NEWSWIRE) -- Targa Resources Corp. (NYSE: TRGP) (“TRGP,” the “Company” or “Targa”) today reported first quarter 2025 results. First quarter 2025 net income attributable to Targa Resources Corp. was $270.5 million compared to $275.2 million for the first quarter of 2024. The Company reported adjusted earnings before interest, income taxes, depreciation and amortization, and other non-cash items (“adjusted EBITDA”)(1) of $1,178.5 million for the first quarter of 2025 compared to $ ...

Wall Street analysts expect Targa Resources, Inc. (TRGP) to post quarterly earnings of $2.04 per share in its upcoming report, which indicates a year-over-year increase of 67.2%. Revenues are expected to be $5.73 billion, up 25.5% from the year-ago quarter.The consensus EPS estimate for the quarter has been revised 1.3% higher over the last 30 days to the current level. This reflects how the analysts covering the stock have collectively reevaluated their initial estimates during this timeframe.Prior to a co ...

HOUSTON, April 10, 2025 (GLOBE NEWSWIRE) -- Targa Resources Corp. (NYSE: TRGP) ("Targa" or the "Company") announced today that its board of directors has declared an increase to its quarterly cash dividend to $1.00 per common share, or $4.00 per common share on an annualized basis, for the first quarter of 2025, consistent with previously disclosed expectations. This dividend represents a 33 percent increase over the common dividend declared with respect to the first quarter of 2024. This cash dividend will ...

Group 1 - Targa Resources, Inc. (TRGP) shares increased by 8.2% to $173.65, following a significant trading volume, contrasting with an 11.4% loss over the past four weeks [1] - The rise in Targa's stock price is attributed to the increase in natural gas prices, which followed the upward trend in oil prices, and a broader market rally due to President Trump's tariff policy changes [2] - The company is expected to report quarterly earnings of $2.04 per share, reflecting a year-over-year increase of 67.2%, with revenues projected at $5.58 billion, up 22.4% from the previous year [3] Group 2 - The consensus EPS estimate for Targa Resources has been revised 4.1% higher in the last 30 days, indicating a positive trend that typically leads to price appreciation [4] - Targa Resources is classified under the Zacks Oil and Gas - Refining and Marketing - Master Limited Partnerships industry, with a current Zacks Rank of 3 (Hold) [4] - Global Partners LP (GLP), another company in the same industry, saw its stock rise by 8% but has a negative return of -17.9% over the past month [4]

Core Insights - Targa Resources Corp. (TRGP) has seen a significant 29.1% increase in its share price over the past six months, outperforming the broader oil and energy sector, which remained stagnant at 0% [1] - The company has achieved record adjusted EBITDA of $4.1 billion in 2024, reflecting a 17% year-over-year increase, driven by strong operations in its Permian, NGL transportation, fractionation, and LPG export businesses [7] - TRGP's revenue model is predominantly fee-based, with over 90% of expected 2025 revenues coming from contracts that insulate the company from commodity price volatility [9] Company Overview - Targa Resources Corp. specializes in natural gas services, including gathering, processing, compressing, treating, and selling, with a strategic location in Mont Belvieu, TX, which is home to the world's largest natural gas liquids hub [4] - The company operates with a fractionation capacity of approximately 938,000 barrels per day and has advanced LPG export facilities at its Galena Park Marine Terminal [5] Growth Drivers - TRGP is expanding its infrastructure with major projects such as the Delaware Express pipeline expansion and the GPMT LPG Export Expansion, backed by a capital investment of $2.6 billion to $2.8 billion in 2025 [8] - The company is well-positioned to benefit from increasing global demand for U.S. NGLs and LNG, with record pipeline transportation and export volumes in 2024 [10][11] Market Position - Targa's infrastructure, including pipelines and processing plants, is strategically aligned to meet the growing global demand for U.S. natural gas liquids, which are essential for petrochemical and industrial applications [11] - The company’s investments in high-growth regions like the Permian Basin are expected to enhance its market share as energy markets evolve [11] Financial Performance - The record-high financial performance of TRGP showcases its ability to generate stable cash flows, making it an attractive investment in the midstream energy sector [7] - The company's strong demand for NGLs and LNG exports positions it favorably in an expanding global energy market [10] Risks and Challenges - TRGP faces potential regulatory and environmental uncertainties, including new emissions regulations and policies favoring renewable energy, which could impact future expansions [12] - Increasing competition in the NGL export market poses risks to pricing and margins, necessitating the need for long-term contracts to avoid overcapacity [13] - The company's high EV/EBITDA ratio of 14.39 compared to the sub-industry average of 10.95 raises concerns about valuation sustainability [15]

Core Insights - Targa Resources Corp. (TRGP) reported fourth-quarter 2024 adjusted earnings of $1.44 per share, missing the Zacks Consensus Estimate of $1.88, but showing an increase from $1.23 in the same quarter last year, driven by strong NGL sales [1] - Total quarterly revenues rose to $4.4 billion from $4.2 billion year-over-year, exceeding the Zacks Consensus Estimate of $4.1 billion, attributed to higher commodity sales and increased midstream service fees [2] - The company's adjusted EBITDA for the fourth quarter reached $1.1 billion, up from $959.9 million in the prior-year period [3] Financial Performance - Targa declared a quarterly cash dividend of 75 cents per common share for Q4 2024, amounting to approximately $164 million distributed to shareholders [4] - The company repurchased 610,683 shares at an average price of $176.86 per share, spending about $108 million, with over $1 billion remaining in its share repurchase program as of December 31, 2024 [5] - Targa reported record full-year and fourth-quarter volumes in Permian, NGL transportation, fractionation, and LPG exports, with significant new projects completed [6][7] Segment Performance - The Gathering and Processing segment had an operating margin of $598.9 million, up 11.75% year-over-year, but below the consensus estimate of $620 million, with Permian Basin volumes increasing 14.9% to an average of 6,065.2 MMcf/d [8] - The Logistics and Transportation segment's operating margin was $656.2 million, an 18.4% increase year-over-year, surpassing the Zacks Consensus Estimate of $624 million, driven by higher pipeline transportation and fractionation volumes [9] - Fractionation volumes totaled 1,089.5 thousand barrels per day, a 29% increase from the previous year, exceeding the consensus estimate of 1,023 thousand barrels per day [10] Costs and Capital Expenditures - Targa incurred product costs of $2.9 billion in Q4, a marginal increase of 1% year-over-year, while operating expenses rose 13% to $305.8 million [12] - The company spent $819.7 million on growth capital programs, compared to $636 million in the prior-year period [12] - As of December 31, 2024, Targa had cash and cash equivalents of $157.3 million and long-term debt of $13.8 billion, with a debt-to-capitalization ratio of approximately 76.2% [13] 2025 Guidance - For 2025, Targa projects full-year adjusted EBITDA between $4.65 billion and $4.85 billion, reflecting a 15% increase compared to 2024, with expectations of record growth in Permian G&P operations [14] - Estimated net growth capital expenditures for 2025 are projected to be between $2.6 billion and $2.8 billion, with maintenance capital expenditures around $250 million [15] - Targa plans to propose a 33% increase in its quarterly common dividend to $1.00 per share for Q1 2025, pending board approval [16]

Core Viewpoint - Investors are increasingly seeking growth stocks that demonstrate above-average growth potential, with Targa Resources, Inc. (TRGP) being highlighted as a strong candidate due to its favorable growth metrics and Zacks Rank [1][2]. Group 1: Earnings Growth - Targa Resources has a historical EPS growth rate of 70.2%, with projected EPS growth of 44.1% for the current year, surpassing the industry average of 36.7% [4]. - Double-digit earnings growth is preferred by growth investors as it indicates strong future prospects and potential stock price increases [3]. Group 2: Cash Flow Growth - The company exhibits a year-over-year cash flow growth of 24.7%, significantly higher than the industry average of -9.4% [5]. - Over the past 3-5 years, Targa Resources has maintained an annualized cash flow growth rate of 24.2%, compared to the industry average of 11.5% [6]. Group 3: Earnings Estimate Revisions - There is a positive trend in earnings estimate revisions for Targa Resources, with the current-year earnings estimates increasing by 1.9% over the past month [7]. - A strong correlation exists between earnings estimate revisions and near-term stock price movements, making this trend a positive indicator for investors [7]. Group 4: Overall Assessment - Targa Resources has achieved a Growth Score of A and a Zacks Rank of 2, indicating it is a solid choice for growth investors and a potential outperformer in the market [9].

Core Viewpoint - Targa Resources, Inc. (TRGP) has received a Zacks Rank 2 (Buy) upgrade due to an upward trend in earnings estimates, indicating a positive earnings outlook that may lead to increased stock prices [1][3]. Earnings Estimates and Stock Price Movement - Changes in a company's future earnings potential, as reflected in earnings estimate revisions, are strongly correlated with near-term stock price movements [4]. - Institutional investors utilize earnings estimates to determine the fair value of a company's shares, influencing their buying and selling decisions, which in turn affects stock prices [4]. Business Improvement Indicators - The rising earnings estimates and the Zacks Rank upgrade suggest an improvement in Targa Resources' underlying business, which is expected to drive the stock price higher [5]. Earnings Estimate Revisions - Targa Resources is projected to earn $8.27 per share for the fiscal year ending December 2025, reflecting a year-over-year increase of 44.1% [8]. - Over the past three months, the Zacks Consensus Estimate for Targa Resources has increased by 1.2% [8]. Zacks Rank System - The Zacks Rank system classifies stocks based on earnings estimates, with only the top 20% of stocks receiving a 'Strong Buy' or 'Buy' rating, indicating superior earnings estimate revision features [9][10]. - Targa Resources' upgrade to Zacks Rank 2 places it in the top 20% of Zacks-covered stocks, suggesting potential for market-beating returns in the near term [10].

Financial Data and Key Metrics Changes - Targa Resources reported a record adjusted EBITDA of $4.1 billion for 2024, a 17% increase compared to 2023, driven by strong operational metrics despite weak natural gas and NGL prices [13][37] - The fourth quarter adjusted EBITDA was $1.122 billion, reflecting a 5% increase from the third quarter, attributed to higher Permian volumes [36][37] - The company expects 2025 adjusted EBITDA to be between $4.65 billion and $4.85 billion, representing a 15% increase over 2024 [39] Business Line Data and Key Metrics Changes - Permian GMP volumes grew by 14% year-over-year in 2024, with an incremental 709 million cubic feet per day moving through the system [11] - NGL pipeline transportation volumes averaged a record during the fourth quarter, with fractionation volumes also reaching a record of 1.1 million barrels per day [21] - The logistics and transportation segment is expected to benefit from full-year contributions of the Daytona NGL pipeline and trains nine and ten [40] Market Data and Key Metrics Changes - The company anticipates continued volume growth in the Permian Basin, which will drive operating margins across its businesses [40] - The outlook for NGL supply growth remains robust, supported by downstream system expansions to handle growth from the Permian systems [22] Company Strategy and Development Direction - Targa Resources announced three new projects aimed at expanding NGL capacity, including the Delaware Express pipeline and new fractionators [9][10] - The company is focused on maintaining a strong balance sheet while investing in organic growth opportunities and returning capital to shareholders [34][15] - Targa's strategy includes opportunistic share repurchases and significant dividend increases, with a 33% increase in the annualized 2025 common dividend per share expected [14][33] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the company's growth trajectory, highlighting strong commercial success and increased infrastructure investments [7][12] - The company expects to see significant volume growth in 2026, driven by the addition of four new Permian plants [12][14] - Management acknowledged weather-related challenges in Q1 but remains optimistic about the overall growth outlook for 2025 and beyond [52] Other Important Information - Targa completed the purchase of BP's 12% interest in Cedar Bayou Fractionators for approximately $111 million, now owning 100% of the asset [25] - The company also announced a definitive agreement to repurchase all outstanding preferred equity in Targa Badlands LLC for approximately $1.8 billion, enhancing its financial flexibility [26][27] Q&A Session Summary Question: Forward outlook and EBITDA trajectory - Management indicated a strong growth outlook for 2025, with expectations for more back-half growth and significant contributions from commercial deals [50][52] Question: Badlands buy-in clarification - Management confirmed the decision was opportunistic, driven by a strong balance sheet and the potential for $80 million in annual cash savings [62] Question: Capital allocation priorities - Management emphasized an all-of-the-above approach, balancing organic growth investments with opportunistic share repurchases and dividend increases [66][70] Question: Commercial success across footprint - Management noted good commercial success in both the Midland and Delaware basins, with significant activity and acreage positions available [76][78] Question: Expected returns on new projects - Management affirmed that the previously guided five and a half times build multiple remains a reasonable starting point for modeling [104] Question: North Texas Mountain Valley NGL pipeline timing - Management discussed the need for new capital and the ongoing evaluation of additional long-haul pipe projects to support growth [128][131]

Operational Risks - The company operates predominantly on fee-based arrangements for its Gathering and Processing and Logistics and Transportation businesses, which exposes it to commodity price risks under certain agreements[164]. - A reduction in demand for NGL products could materially adversely affect the company's business, results of operations, and financial condition[165]. - The company faces competitive pressures from larger companies with greater financial resources, which could adversely affect its ability to maintain current revenues and cash flows[176]. - The company relies on third-party pipelines and facilities for transportation, and any unavailability could adversely affect its revenues[179]. - The natural decline in production from existing wells means the company must continually secure new sources of natural gas, NGLs, and crude oil to maintain throughput levels[172]. - The company does not own most of the land on which its pipelines and facilities are located, which could disrupt operations if rights of way or leases are not renewed[182]. - Weather events may damage the company's infrastructure and increase operational costs, adversely impacting its business and financial condition[185]. - The company faces significant operational risks due to weather events, which may lead to disruptions and adverse effects on throughput and financial condition[186]. - Rising sea levels and erosion could damage pipeline infrastructure, potentially resulting in significant repair costs and impacting service provision[187]. - The company may incur substantial costs for weatherization of facilities to comply with new regulations, which could affect financial performance[188]. - Increased maintenance and repair expenditures are anticipated due to the aging pipeline systems, which could materially impact revenue[192][193]. Management and Personnel Risks - The company’s success is dependent on its named executive officers, and losing any of them could harm its business strategies[184]. Financial Risks - The company’s revenues and cash flows are sensitive to fluctuations in energy prices, which can affect production rates and investments by third parties[175]. - The company does not obtain independent evaluations of reserves connected to its gathering systems, leading to potential discrepancies in future volume expectations[181]. - The company is exposed to credit risks from customers, with potential nonpayment affecting cash flow and the ability to pay dividends[222]. - Hedging activities may not effectively reduce cash flow variability and could expose the company to increased commodity price risks[228]. - The company evaluates long-lived assets for impairment, which could lead to material charges affecting financial statements if energy industry conditions deteriorate[227]. - The company’s ability to service its debt will depend on future financial and operating performance, which may be affected by economic conditions[261]. - The company may not be able to maintain or increase cash dividend levels if it incurs additional debt or issues more shares[233]. - The company’s substantial level of indebtedness increases the risk of being unable to generate sufficient cash to meet debt obligations[258]. - Debt agreements impose significant operating and financial restrictions, including limitations on incurring additional indebtedness and paying dividends[264]. - A breach of covenants could lead to an event of default, requiring immediate repayment of outstanding amounts[266]. Regulatory and Compliance Risks - Regulatory changes, such as the "Gas Mega Rule," may require additional capital projects and increase operating costs, adversely affecting financial results[200][202]. - The company is subject to cybersecurity risks that could lead to operational disruptions and financial losses[203][204]. - The company is subject to stringent regulations regarding GHG emissions, with a methane emissions fee starting at $900 per ton in 2024, increasing to $1,500 by 2026[269]. - New EPA methane rules finalized in December 2023 may increase operating costs and affect financial results[270]. - Future regulatory changes could increase compliance costs and reduce demand for oil and natural gas, adversely affecting the company's business[277]. - The company is subject to various environmental laws and regulations, and failure to comply could result in substantial liabilities and increased operational costs[286]. - Stricter regulations, such as the EPA's Good Neighbor Plan, could reduce demand for the company's products and accelerate the transition away from oil and gas[288]. - Uncertainty regarding the Clean Water Act's jurisdictional reach may lead to delays and increased compliance costs for the company's operations[289]. - Legal challenges to Nationwide Permit 12 could result in increased costs and project delays for the company[290]. - Changes in regulatory characterization of assets may lead to increased operating expenses and reduced revenues[291]. - The company must maintain compliance with FERC regulations, with potential penalties for violations reaching approximately $1.6 million per day[297]. - The company operates under various federal and tribal regulations that may increase operational costs and impact its ability to conduct business on tribal lands[295]. - FERC's policies may indirectly affect the natural gas and liquids markets, impacting the company's operations and market access[296]. Sustainability and Environmental Risks - Institutional investors are increasingly focused on sustainability, which may affect capital availability for fossil fuel companies[276]. - The company has established a Sustainability Committee to oversee sustainability practices and published its 2023 Sustainability Report[281]. - The company may face reputational damage and litigation risks if it fails to meet sustainability targets and initiatives[281]. - Increased scrutiny from investors and regulators regarding sustainability practices may lead to litigation risks and negative sentiment, impacting investment and operational decisions[283]. - The company faces significant costs related to compliance with stringent occupational safety and health requirements, which could adversely affect its financial condition and results of operations[284]. - The company is subject to increasingly complex cybersecurity and data privacy laws, which may elevate compliance costs over time[298]. - Texas has enacted data privacy legislation that could impact the company's operations and compliance expenses[298]. - The company collects and processes personal information of employees, investors, contractors, suppliers, and customer contacts, which poses compliance challenges[298]. - Significant resources may be required to modify or enhance protective measures in response to evolving legislation and cyber incidents[298]. - Non-compliance with cybersecurity and data privacy laws could result in reputational harm, loss of goodwill, and financial penalties[298]. Growth and Investment Risks - Future growth is contingent on the successful development of growth projects and acquisitions; failure to do so may limit cash flow and shareholder returns[208]. - The company must effectively integrate acquired assets to avoid adverse impacts on financial condition and operational results[209]. - Risks associated with growth projects include difficulties in asset assimilation, unexpected costs, and failure to achieve anticipated revenues and synergies[210]. - A reduction in divestitures of energy assets could limit opportunities for future growth projects and adversely affect cash flows available for dividends[212]. - Construction of new midstream assets may require substantial capital investment and could be delayed, impacting revenue generation timelines[207]. - Inflationary pressures have resulted in increased costs for goods and services, impacting capital expenditures and operating costs[223]. - Future tax liability may be greater than expected if NOL carryforwards are limited or if tax authorities challenge certain tax positions[235]. - The company has outstanding net derivative positions with credit-risk related contingent features in a net liability position of $138.2 million as of December 31, 2024[260]. - As of December 31, 2024, the company has U.S. federal NOL carryforwards of $4.7 billion, which do not expire under current tax laws[236]. - The company’s long-term unsecured debt is rated "BBB" by Fitch, "Baa2" by Moody's, and "BBB" by S&P as of December 31, 2024[259]. - The Dodd-Frank Act and related regulations could increase the cost of derivative contracts, potentially affecting the company's financial condition[247].