uploads///trgp is trading at a valuation close to peer average

Targa Resources’ Valuation Could Indicate a Buying Opportunity


Dec. 4 2020, Updated 10:53 a.m. ET

TRGP’s valuation

Targa Resources (TRGP) stock has tripled in the last year, outperforming its peers in the sector. Let’s take a look at the stock’s current valuation.

Targa Resources is currently trading at an EV-to-EBITDA (enterprise value to earnings before interest, tax, depreciation, and amortization) multiple of nearly 14x, close to the average multiple for its selected peers.

The graph above compares TRGP’s EV-to-EBITDA multiple with those of its selected peers. Kinder Morgan (KMI) is trading at a lower multiple compared to TRGP. On the other hand, Magellan Midstream Partners (MMP) is trading at a much higher EV-to-EBITDA multiple than TRGP.

So, Targa Resources stock seems to be trading at a fair valuation, despite a three-fold increase in its price in the last year.

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