Targa Resources Corp. Earnings Missed Analyst Estimates: Here's What Analysts Are Forecasting Now

Targa Resources Corp. (NYSE:TRGP) missed earnings with its latest quarterly results, disappointing overly-optimistic forecasters. It wasn't a great result overall - while revenue fell marginally short of analyst estimates at US$4.6b, statutory earnings missed forecasts by an incredible 54%, coming in at just US$0.91 per share. The analysts typically update their forecasts at each earnings report, and we can judge from their estimates whether their view of the company has changed or if there are any new concerns to be aware of. So we collected the latest post-earnings statutory consensus estimates to see what could be in store for next year.

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After the latest results, the nine analysts covering Targa Resources are now predicting revenues of US$21.5b in 2025. If met, this would reflect a huge 31% improvement in revenue compared to the last 12 months. Per-share earnings are expected to bounce 39% to US$7.68. Yet prior to the latest earnings, the analysts had been anticipated revenues of US$23.1b and earnings per share (EPS) of US$8.15 in 2025. The analysts are less bullish than they were before these results, given the reduced revenue forecasts and the minor downgrade to earnings per share expectations.

Check out our latest analysis for Targa Resources

Despite the cuts to forecast earnings, there was no real change to the US$210 price target, showing that the analysts don't think the changes have a meaningful impact on its intrinsic value. It could also be instructive to look at the range of analyst estimates, to evaluate how different the outlier opinions are from the mean. The most optimistic Targa Resources analyst has a price target of US$259 per share, while the most pessimistic values it at US$157. There are definitely some different views on the stock, but the range of estimates is not wide enough as to imply that the situation is unforecastable, in our view.

Another way we can view these estimates is in the context of the bigger picture, such as how the forecasts stack up against past performance, and whether forecasts are more or less bullish relative to other companies in the industry. It's clear from the latest estimates that Targa Resources' rate of growth is expected to accelerate meaningfully, with the forecast 43% annualised revenue growth to the end of 2025 noticeably faster than its historical growth of 12% p.a. over the past five years. Compare this with other companies in the same industry, which are forecast to grow their revenue 3.7% annually. Factoring in the forecast acceleration in revenue, it's pretty clear that Targa Resources is expected to grow much faster than its industry.

The Bottom Line

The biggest concern is that the analysts reduced their earnings per share estimates, suggesting business headwinds could lay ahead for Targa Resources. Regrettably, they also downgraded their revenue estimates, but the latest forecasts still imply the business will grow faster than the wider industry. There was no real change to the consensus price target, suggesting that the intrinsic value of the business has not undergone any major changes with the latest estimates.

Keeping that in mind, we still think that the longer term trajectory of the business is much more important for investors to consider. We have forecasts for Targa Resources going out to 2027, and you can see them free on our platform here.

You should always think about risks though. Case in point, we've spotted 3 warning signs for Targa Resources you should be aware of.

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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.