Wall Street Analysts Expect 13% Upside for Targa Resources



Recommendations for TRGP

Of the analysts surveyed by Reuters, 62% rate Targa Resources (TRGP) as a “buy,” while 38% rate the stock as a “hold.” The mean target price for Targa Resources in a year is $53.8. Targa Resources stock is trading at $49.9. If Targa Resources achieves its target price, it would imply 8% upside in a year.

On February 9, 2018, Morgan Stanley raised its price target for Targa Resources from $50 to $53. On February 7, UBS raised TRGP’s price target from $55 to $56.

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Recommendation trends

As the above graph shows, the mean price target for Targa Resources fell from $58.2 in February 2017 to $53.8 now. TRGP stock fell 19% over this period. 42% of analysts rated TRGP a “buy” in February 2017 compared to 62% now.

TRGP’s valuation

Targa Resources currently trades at a forward EV-to-EBITDA (enterprise value to earnings before interest, tax, depreciation, and amortization) multiple of 11.8x. This is close to its five-year average multiple of 11.5x. Targa Resources’ multiple is lower compared to ONEOK (OKE), which is trading at a forward EV-to-EBITDA multiple of 14.3x. However, it’s higher compared to Kinder Morgan’s (KMI) forward EV-to-EBITDA of 10.4x. Targa Resources is currently trading at a dividend yield of ~7.6%.

Next, let’s discuss how analysts have changed ratings on ONEOK (OKE) over the last year.


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