Targa Resources (TRGP): Assessing Valuation After a Recent Share Price Pullback

Recent performance and why Targa is on investors' radar

Targa Resources (TRGP) has been drifting lower in the past week, but its longer track record, including strong 3 year and 5 year total returns, makes the recent pullback worth a closer look.

See our latest analysis for Targa Resources.

The recent dip in Targa’s share price, down 3.24 percent on a 1 day basis to 176.41 dollars and softer year to date share price return, looks more like a pause within a longer uptrend that is still reflected in its strong multi year total shareholder returns.

If Targa’s moves have you rethinking your watchlist, this could be a good moment to explore aerospace and defense stocks as another corner of the market where structural tailwinds can drive long term compounding.

With shares now trading at a hefty intrinsic discount but still sitting below analyst targets, the key question is whether Targa remains mispriced or if the market has largely factored in the next leg of growth.

Most Popular Narrative Narrative: 16% Undervalued

With Targa Resources last closing at 176.41 dollars against a narrative fair value near 208.90 dollars, the story leans toward meaningful upside if the forecasts land.

The analysts have a consensus price target of $207.421 for Targa Resources based on their expectations of its future earnings growth, profit margins and other risk factors. However, there is a degree of disagreement amongst analysts, with the more bullish reporting a price target of $240.0, and the most bearish reporting a price target of just $186.0.

Read the complete narrative.

Want to see what is powering that higher fair value band, even with only steady growth assumptions and a rich future earnings multiple built in? The narrative unpacks how revenue, margin expansion, and share count shifts all combine to support a valuation more often associated with faster growing sectors. Curious which financial levers have to move, and by how much, for this upside to hold together? Dive in to see the precise growth blueprint behind that price.

Result: Fair Value of $208.9 (UNDERVALUED)

Have a read of the narrative in full and understand what's behind the forecasts.

However, intensifying Permian competition and potential midstream overbuild could compress fees, challenge growth assumptions, and force a rethink of what upside is realistically achievable.

Find out about the key risks to this Targa Resources narrative.

Another View on Valuation

On a simple price to earnings lens, Targa looks far less forgiving. Shares trade at about 23.4 times earnings versus roughly 13.2 times for the US Oil and Gas industry and around 14.1 times for peers, and above a fair ratio near 20.3 times, which suggests real de rating risk if growth stumbles.

See what the numbers say about this price — find out in our valuation breakdown.

Build Your Own Targa Resources Narrative

If you would rather dig into the numbers yourself or challenge these assumptions using your own framework, you can build a custom narrative in minutes by using Do it your way.

A great starting point for your Targa Resources research is our analysis highlighting 3 key rewards and 3 important warning signs that could impact your investment decision.

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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.

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