Of the analysts surveyed by Reuters, 60% recommend a “hold” for Targa Resources (TRGP) stock. About 40% of the analysts surveyed have rated Targa Resources a “buy.”
The median analyst target price for TRGP is $52.5. The stock is currently trading at $58. The median target price implies nearly a 10% downside from the stock’s current price.
The above graph shows the analyst recommendations for Targa Resources. As for other midstream companies, 93% rated Enterprise Products Partners (EPD) a “buy,” and 69% rated ONEOK Partners (OKS) a “hold.”
Outlook for TRGP
In the 3Q16 press release, Joe Bob Perkins, CEO of Targa Resources, said, “We continue to see strong results for our businesses in the Permian and are encouraged with operational performance across the company. The third quarter drop in LPG export volumes has been more than offset by recent export activity, and we now expect to exceed our full year guidance for average export volumes.”
He further added, “With this performance, coupled with the receipt of the first annual payment related to the crude and condensate splitter, Adjusted EBITDA for the fourth quarter will likely be the highest of the year. We expect fourth quarter dividend coverage approaching 1.2 times and full year coverage consistent with our guidance of slightly above 1.0 times. Looking forward, our Field Gathering and Processing volumes should grow with improving prices, and our Downstream businesses will benefit from similar trends.”
Next, we’ll analyze the key operational metrics of Targa Resources.