On Tuesday, Citi expressed continued confidence in Targa Resources Corp (NYSE:TRGP), maintaining a Buy rating and a $112.00 price target for the stock. The firm's analysis anticipates Targa's EBITDA to reach $950 million, slightly above the consensus estimate of $941 million. This forecast accounts for a projected dip in performance due to weather-related volume impacts and increased operational expenses as the company prepares for new projects to commence service.
Targa Resources, according to the firm, has included these factors in their annual guidance, and significant commodity price fluctuations are not expected to pose a major challenge. This is attributed to the company's established fee floors, which provide a buffer against the lower natural gas prices currently being observed. In the Permian Basin, the recent launch of processing capacities—Greenwood in early fourth quarter of 2023 and Wildcat in late fourth quarter of 2023—might experience a slower ramp-up due to weather conditions experienced in January.
Nevertheless, the firm anticipates a robust end to the quarter for Targa Resources, with the potential for an upside in estimates if volume outperformance occurs. Looking ahead, the possibility of at least one new project announcement this quarter has been suggested, which aligns with previous discussions about the procurement of long-lead items for Frac 11 and two additional processing plants. These prospective projects are believed to have been factored into the capital expenditure budgets for 2024-2025.
InvestingPro Insights
In light of Citi's positive outlook on Targa Resources Corp (NYSE:TRGP), the latest real-time data from InvestingPro can offer additional context for investors considering the stock. With a market capitalization of $25.21 billion and an adjusted P/E ratio of 30.41 as of the last twelve months ending Q4 2023, TRGP is trading at a high earnings multiple, which suggests that investors have high expectations for the company's future earnings growth.
InvestingPro Tips reveal that TRGP has shown a strong return over the last year, with a year-to-date price total return of 29.94% and an impressive 57.69% return over the past twelve months. This aligns with the stock trading near its 52-week high, at 99.75% of the peak price. The company's ability to maintain dividend payments for 14 consecutive years, coupled with a recent dividend growth of 42.86%, also highlights its commitment to shareholder returns.
For investors seeking more in-depth analysis, there are additional InvestingPro Tips available, which can be accessed through the company's dedicated page at https://www.investing.com/pro/TRGP. To further enhance your investment research, use coupon code PRONEWS24 to get an additional 10% off a yearly or biyearly Pro and Pro+ subscription. There are 9 more InvestingPro Tips listed for TRGP, offering a wealth of information to guide your investment decisions.
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