Houston, Texas-based Targa Resources Corp. (TRGP) owns, operates, acquires, and develops a portfolio of complementary domestic midstream infrastructure assets in North America. With a market cap of $29.8 billion, Targa Resources operates through Gathering and Processing, and Logistics and Transportation segments. It is expected to announce its Q2 earnings before the market opens on Thursday, Aug. 1.
Ahead of the event, analysts expect Targa Resources to report a profit of $1.16 per share, down 19.4% from $1.44 per share reported in the year-ago quarter. The company has missed Wall Street’s EPS projections in three of the past four quarters while surpassing on one other occasion. Its EPS for the last reported quarter grew significantly to $1.22. However, it missed the consensus estimate by 9.6%.
In fiscal 2024, analysts expect Targa Resources to report an EPS of $5.27, up 44% from $3.66 in fiscal 2023. In fiscal 2025, its EPS is expected to grow 30.9% year over year to $6.90.
TRGP stock is up 54.6% on a YTD basis, substantially outperforming the S&P 500 Index’s ($SPX) 18.1% gains and the S&P 500 Energy Sector SPDR’s (XLE) 9.6% returns over the same time frame.
TRGP’s solid momentum in 2024 could be attributed to its robust infrastructure network and strategic assets position, providing Targa Resources with a competitive edge. However, the legal contingencies, including environmental compliance issues and breach of contract cases related to force majeure events have made investors cautious as it could impact the company’s financials and reputation.
Moreover, the stock edged up marginally on May 2 after the company announced its Q1 earnings report. While it missed its EPS estimate, its revenue of $4.6 billion beat the consensus estimate by 6.1%.
On the bright side, the company has been consistent in dividend payouts, rewarding its shareholders for 12 consecutive years. Recently, it announced a quarterly dividend of $0.75 per share, payable to its shareholders on Aug. 15. Moreover, it repurchased shares worth $160.2 million in Q1, demonstrating its commitment toward shareholders.
The consensus opinion on Targa Resources stock is bullish, with a “Strong Buy” rating overall. Out of the 18 analysts covering the stock, 16 recommend a “Strong Buy,” and two suggest a “Moderate Buy” rating.
Although the average target price of $134.44 for Targa Resources indicates a marginal upside from the current price levels, the Street-high target price of $148 suggests the stock could rally as much as 10.2%.
On the date of publication, Sristi Jayaswal did not have (either directly or indirectly) positions in any of the securities mentioned in this article. All information and data in this article is solely for informational purposes. For more information please view the Barchart Disclosure Policy here.
