With a market cap of $40.3 billion, Houston, Texas-based Targa Resources Corp. (TRGP) is a leading energy infrastructure company specializing in integrated midstream services across North America. Its diverse portfolio includes gathering, processing, transporting, storing, and selling natural gas and NGLs and logistics services to refiners, petrochemical companies, and exporters.
Companies valued at $10 billion or more are generally considered “large-cap” stocks, and Targa Resources fits this criterion perfectly, exceeding the mark. With a strong presence in the Permian Basin and the Mont Belvieu NGL hub, Targa Resources plays a pivotal role in American energy growth, supported by its Grand Prix NGL pipeline and advanced LPG export facilities at Galena Park Marine Terminal.
However, Targa Resources has fallen 12.3% from its 52-week high of $209.87. Shares of TRGP have risen 22.3% over the past three months, which is more pronounced than the Energy Select Sector SPDR Fund’s (XLE) 2.3% rise over the same time frame.
In the long term, TRGP is up nearly 112% on a YTD basis, significantly outperforming XLE’s 5.6% gain. Moreover, shares of Targa Resources have surged 115.6% over the past 52 weeks, compared to XLE’s 5% increase over the same time frame.
To confirm the bullish price trend, TRGP has been trading above its 50-day and 200-day moving averages since last year.
Shares of Targa Resources jumped 4.9% on Nov. 5 due to its strong Q3 2024 earnings report, which surpassed expectations with EPS of $1.75 compared to the consensus estimate. A robust performance in the Logistics and Transportation segment encouraged investors, where the operating margin rose 35% year-over-year to $619.2 million, driven by higher NGL pipeline transportation and LPG export margins. The announcement of plans to construct two 275 MMcf/d gas processing plants in the Permian Basin also boosted sentiment.
Additionally, Targa’s announced plans for a 33% dividend increase to $4 per share in 2025 and ongoing share repurchases underscored its commitment to returning value to shareholders.
To emphasize the stock’s outperformance, its rival Cheniere Energy, Inc. (LNG) has risen 24.7% over the past 52 weeks and is up 24.3% on a YTD basis, underperforming TRGP stock.
Due to the stock’s strong price action, analysts are bullish about its prospects. TRGP has a consensus rating of “Strong Buy” from the 19 analysts covering the stock, and the mean price target of $201.65 represents a premium of just 9.3% to current levels.
