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Targa Resources Is Up 47% in 2016: What’s Next?



Targa’s year-to-date rise

Targa Resources (TRGP) has risen 47% so far in 2016. In comparison, ONEOK Partners (OKS) is up 24%, and Kinder Morgan (KMI) is up 16% during the same timeframe. The Alerian MLP ETF (AMLP) is up 3% in 2016. So, TRGP has gained more than its peers in 2016.

In this series, we’ll analyze the reasons for this outperformance. We’ll also analyze the company’s key financial and operational metrics in depth. Finally, we’ll look at TRGP’s valuation compared to peers and discuss how attractive the stock is.

Targa Resources completed the acquisition of its MLP Targa Resources Partners in February 2016. The merger was announced in November 2015.

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TRGP trades above its 200-day moving average

The above graph shows TRGP’s stock price movement over the last one-year period. It also shows TRGP’s 50-day and 200-day moving average. Targa Resources currently trades 2.4% above its 50-day moving average and 3.3% above its 200-day moving average. The stock price crossed above its 200-day moving average in mid-May 2016 and has been trading above that since then.

Targa Resources engages primarily in the following:

  • gathering and processing of natural gas
  • NGL (natural gas liquids) storage, fractionation, and transport
  • storing and terminaling of crude oil and refined products

Targa Resources’ gathering and processing assets are located primarily in the Permian Basin, the Bakken Shale, the Barnett Shale, the Eagle Ford Shale, the Anadarko Basin, the Arkoma Basin, onshore Louisiana, and the Gulf of Mexico.

Next, we’ll see what Wall Street analysts are recommending for Targa Resources currently.


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