Core Points - Targa Resources Corp. declared a quarterly cash dividend of $1.00 per common share for Q2 2025, equating to an annualized rate of $4.00 per share, payable on August 15, 2025, to shareholders of record as of July 31, 2025 [1] - The company will report its Q2 2025 financial results before market opens on August 7, 2025, followed by a live webcast at 11:00 a.m. Eastern Time to discuss these results [2][3] Company Overview - Targa Resources Corp. is a leading provider of midstream services and one of the largest independent infrastructure companies in North America, focusing on the efficient delivery of energy across the U.S. and globally [4] - The company operates a diversified portfolio of assets that connect natural gas and NGLs to domestic and international markets, catering to the growing demand for cleaner fuels [4] - Targa is engaged in various activities including gathering, compressing, treating, processing, transporting, and selling natural gas, as well as handling NGLs and crude oil [4]

Targa's Value Proposition and Growth - Targa is the largest gatherer and processor in the Permian Basin, driving integrated returns through NGL pipeline transportation, fractionation, and LPG exports[9] - The company has experienced significant volume growth, with a +24% CAGR in fractionation volumes and +12% CAGR in LPG export volumes from FY 2019 to YTD 3Q24[12] - Permian natural gas inlet volumes have grown at a +25% CAGR from Q4 2019 to YTD 3Q24[16] - Targa's adjusted EBITDA has grown by +182% since 2019, driven by its integrated NGL business and strong business fundamentals[19] Financial Performance and Shareholder Returns - Management expects to recommend to Targa's Board of Directors an increase to the 2025 quarterly cash common dividend to $4.00 per share annualized for the first quarter of 2025, representing a +33% YoY increase[9, 10] - Targa has repurchased over 202 million shares since October 2020 at a weighted average price of ~$7069[19] - The company's 2024E fee-based volumes in G&P are approximately ~90%[9, 66] - Targa expects to return 40-50% of adjusted cash flow from operations across a multi-year horizon[75] Permian Basin and Infrastructure - Targa has a premier Permian asset footprint with ~88 Bcf/d gross processing capacity across 43 plants[26, 27, 80] - The company is expanding its Permian G&P footprint, with several new plants scheduled to come online between 1Q25 and 3Q26[32, 94] - Targa's Daytona NGL Pipeline has a capacity of 400 MBbl/d and was expected to be in service in 3Q24[95]

Core Insights - Targa Resources Corp. (TRGP) has experienced a significant share price increase of 43.9% over the past year, outperforming the broader Oils-Energy sector's 7.2% rise and the Oil Refining & Marketing sub-industry's 28% growth [1][8] - The company is strategically positioned in the energy infrastructure sector, focusing on natural gas operations, including gathering, processing, and transportation [3][4] Financial Performance - TRGP reported a record adjusted EBITDA of $1.18 billion in Q1 2025, reflecting a 22% year-over-year increase, driven by higher volumes from the Permian Basin and improved marketing margins [5][8] - The company has reaffirmed its full-year 2025 adjusted EBITDA guidance of $4.65-$4.85 billion, indicating confidence in sustained growth [5] Strategic Advantages - Targa's operations are supported by fee-based contracts, providing stability in volatile commodity price environments, with a competitive edge due to its scale [6] - The company has a dominant presence in the Permian Basin, with natural gas inlet volumes increasing by 11% year over year, and is expanding its infrastructure to enhance capacity [9][10] Growth Initiatives - Targa's LPG export volumes averaged 13.4 million barrels per month in Q1 2025, with plans to expand capacity at the Galena Park terminal to 19 million barrels per month by Q3 2027 [11] - The company is executing $2.6-$2.8 billion in growth capital expenditures for 2025, focusing on high-return projects to support volume growth and system integration [15] Shareholder Returns - Targa has repurchased $214 million in shares through April 2025 and increased its quarterly dividend by 33% to $1 per share, reflecting a commitment to rewarding shareholders [13] Risk Mitigation - The company has hedged over 90% of its exposed volumes through 2026, reducing earnings volatility from fluctuating natural gas and NGL prices, ensuring stable cash flows [14]

Company Overview - Targa Resources is a midstream energy company focused on gathering, processing, transporting, and marketing natural gas and natural gas liquids [1] - The company is primarily based in the Permian basin and other shale plays in the USA [1] Investment Focus - The company targets long-term and medium-term value investments [1] - It emphasizes investing in companies with strong fundamentals and maintains a sector-agnostic approach [1]

Core Insights - Targa Resources (NYSE: TRGP) has seen a significant share price increase of 40% recently, but has underperformed in the last two months, remaining flat while the broader market has recovered from early April losses [1] Company Performance - Targa Resources' shares have not followed the upward trend of the pipeline sector, indicating a potential divergence in performance compared to its peers [1] Market Context - The broader market has regained its losses from early April, contrasting with Targa's stagnant performance over the past two months, suggesting specific challenges or market perceptions affecting the company [1]

Core Viewpoint - Targa Resources Corp. is conducting a public offering of $750 million in Senior Notes due 2030 and $750 million in Senior Notes due 2036 to manage its debt and support corporate activities [1][2]. Group 1: Offering Details - The public offering includes $750 million of 4.900% Senior Notes due 2030 priced at 99.870% of face value and $750 million of 5.650% Senior Notes due 2036 priced at 99.700% of face value [1]. - The expected closing date for the offering is June 18, 2025, pending customary closing conditions [1]. Group 2: Use of Proceeds - A portion of the net proceeds will be used to redeem the 6.500% Senior Notes due 2027 [2]. - Remaining proceeds will be allocated for general corporate purposes, including repaying borrowings under the unsecured commercial paper note program, repaying other debts, repurchasing or redeeming securities, and funding capital expenditures or investments in subsidiaries [2]. Group 3: Company Overview - Targa Resources Corp. is a leading provider of midstream services and one of the largest independent infrastructure companies in North America [4]. - The company operates a diversified portfolio of infrastructure assets critical for the delivery of energy across the U.S. and internationally, connecting natural gas and natural gas liquids to markets with growing demand [4].

Core Viewpoint - Targa Resources Corp. (TRGP) reported disappointing first-quarter 2025 results, with adjusted earnings per share of 91 cents, missing the Zacks Consensus Estimate of $2.04, primarily due to lower volumes in the Permian Basin and increased operating expenses [1][2]. Financial Performance - Total quarterly revenues were $4.6 billion, matching the prior-year quarter but missing the Zacks Consensus Estimate of $5.3 billion, attributed to lower commodity sales [2] - Adjusted EBITDA for the first quarter was $1.2 billion, an increase from $966.2 million in the prior-year period [2]. Dividend and Share Repurchase - Targa raised its quarterly cash dividend to $1 per common share, totaling approximately $217 million to be distributed on May 15, 2025 [3]. - The company repurchased 651,163 shares for about $124.9 million at an average price of $191.86 per share, with $890.5 million remaining in its share repurchase program as of March 31, 2025 [4]. Operational Updates - Ongoing projects include construction at several plants in the Permian Basin, with the Pembrook II plant expected to begin operations by the third quarter of 2025 [5][6]. - The Gathering and Processing segment reported an operating margin of $602.2 million, up 8% year over year but below the consensus estimate [6][7]. - The Logistics and Transportation segment's operating margin increased 22% year over year to $646.7 million, also missing the consensus estimate [8]. Volume and Cost Analysis - Gathering and Processing volumes increased 11.3% year over year to an average of 6,006 MMcf/d, but fell short of the consensus mark [7]. - Fractionation volumes rose 23% year over year to 979.9 thousand barrels per day, while NGL pipeline transportation volumes increased 18% [9]. - Product costs were $3.3 billion, up 1% year over year, and operating expenses rose 9% to $303.6 million [11]. Capital Expenditures and Guidance - Targa's growth capital expenditures for 2025 are projected between $2.6 billion and $2.8 billion, with maintenance capital expenditures at $250 million [14]. - The company anticipates full-year adjusted EBITDA of $4.65-$4.85 billion, expecting significant growth in the second half of 2025 [13].

Financial Performance - Targa Resources, Inc. reported revenue of $4.56 billion for the quarter ended March 2025, which is unchanged compared to the same period last year [1] - Earnings per share (EPS) for the quarter was $0.91, down from $1.22 in the year-ago quarter [1] - The reported revenue fell short of the Zacks Consensus Estimate of $5.31 billion, resulting in a surprise of -14.12% [1] - The company experienced an EPS surprise of -55.39%, with the consensus EPS estimate being $2.04 [1] Stock Performance - Targa Resources shares have returned -16.9% over the past month, compared to the Zacks S&P 500 composite's -0.7% change [3] - The stock currently holds a Zacks Rank 3 (Hold), indicating potential performance in line with the broader market in the near term [3] Key Metrics - Gathering and Processing - NGL sales per day were 570.2 million barrels of oil, below the two-analyst average estimate of 577.97 million barrels [4] - Gathering and Processing - Gross NGL production (Coastal) was 32.7 million barrels of oil per day, exceeding the two-analyst average estimate of 31.89 million barrels [4] - Gathering and Processing - Condensate sales per day were 18.1 million barrels of oil, lower than the estimated 20.5 million barrels [4] - Logistics and Marketing - NGL sales were 1186.4 million barrels of oil per day, slightly below the estimated 1198.95 million barrels [4] - Logistics and Marketing - Export volumes were 447.7 million barrels of oil per day, compared to the estimated 455.64 million barrels [4] - Gathering and Processing - Total Plant natural gas inlet volumes were 7526.3 million cubic feet per day, below the estimated 7667.93 million cubic feet [4] - Average realized prices for Condensate were $72.32, slightly below the estimated $73.57 [4] - Average realized prices for Natural gas were $2.24, compared to the estimated $2.45 [4] - Average realized prices for NGL were $0.50, slightly below the estimated $0.51 [4]

Financial Performance - Total revenues for the three months ended March 31, 2025, were $4,561.5 million, a slight decrease of 0.9% compared to $4,562.4 million in the same period of 2024[148]. - Adjusted EBITDA increased by 22% to $1,178.5 million for the three months ended March 31, 2025, compared to $966.2 million for the same period in 2024[148]. - Adjusted cash flow from operations rose by 31% to $970.0 million for the three months ended March 31, 2025, up from $738.4 million in 2024[148]. - Net income attributable to Targa Resources Corp. for the three months ended March 31, 2025, was $270.5 million, a decrease of 2% from $275.2 million in 2024[148]. - Operating expenses increased by 9% to $303.6 million for the three months ended March 31, 2025, compared to $278.0 million in 2024[148]. - Cash flows from operating activities increased to $954.4 million in Q1 2025, up from $876.4 million in Q1 2024, representing a $78.0 million increase[179]. Capital Expenditures and Investments - Capital expenditures for growth projects were $570.7 million in Q1 2025, down from $677.9 million in Q1 2024, primarily due to timing of construction projects[190]. - Net cash used in investing activities rose to $813.3 million in Q1 2025, compared to $677.9 million in Q1 2024, reflecting higher outlays for growth capital projects[182]. - The company completed a public offering resulting in net proceeds of approximately $2.0 billion, used for the Badlands Transaction and general corporate purposes[176]. Dividends and Share Repurchase - The company declared an increase in its quarterly common dividend to $1.00 per share, or $4.00 annualized, effective for Q1 2025[118]. - The company declared dividends of $218.9 million for common stock for the three months ended March 31, 2025, with a dividend per share of $1.00[189]. - Targa Resources Corp. reported a total net cost of $124.9 million for repurchasing 651,163 shares at a weighted average price of $191.86 per share during Q1 2025[121]. Operational Highlights - The adjusted operating margin for the Gathering and Processing segment was $602.2 million for the three months ended March 31, 2025, compared to $556.4 million in 2024[157]. - The adjusted operating margin for the Logistics and Transportation segment was $646.7 million for the three months ended March 31, 2025, compared to $532.1 million in 2024[157]. - The Gathering and Processing segment reported an adjusted operating margin of $810.4 million for Q1 2025, up 9% from $744.5 million in Q1 2024[158]. - The Logistics and Transportation segment achieved an adjusted operating margin of $742.2 million in Q1 2025, a 19% increase from $622.1 million in Q1 2024[162]. - NGL pipeline transportation volumes rose by 18% to 843.5 MBbl/d in Q1 2025, compared to 717.8 MBbl/d in Q1 2024[162]. Debt and Liquidity - Targa entered into a new $3.5 billion revolving credit facility (TRGP Revolver) maturing on February 18, 2030, to support its financial activities[122]. - The company raised approximately $2.0 billion from the issuance of senior unsecured notes due 2035 and 2055 to fund the Badlands Transaction and for general corporate purposes[123]. - The company had $151.4 million in cash and cash equivalents as of March 31, 2025, with total liquidity amounting to $2,722.0 million[169]. - As of March 31, 2025, the company was in compliance with all debt covenants[178]. Future Projects and Expansion - The company announced the construction of three new 275 MMcf/d cryogenic natural gas processing plants in Permian Midland, with expected operational dates in Q3 2025, Q2 2026, and Q3 2026[110]. - Targa's LPG export capacity will increase to up to 19 MMBbl per month following the expansion at Galena Park Marine Terminal, expected to be completed in Q3 2027[114]. - The Blackcomb Joint Venture pipeline is designed to transport up to 2.5 Bcf/d of natural gas and is expected to be operational in the second half of 2026[115]. - Targa completed the acquisition of Blackstone's 45% interest in Targa Badlands LLC for $1.8 billion, resulting in 100% ownership effective January 1, 2025[117]. Market and Pricing - The average realized price for natural gas increased by 49% to $2.24 per MMBtu in Q1 2025, compared to $1.50 per MMBtu in Q1 2024[162]. - Natural gas inlet volumes in the Permian increased by 11% to 6,005.9 MMcf/d in Q1 2025, compared to 5,395.0 MMcf/d in Q1 2024, driven by new plant additions[160].

Targa Resources (TRGP) Q1 2025 Earnings Call May 01, 2025 11:00 AM ET Company Participants Tristan Richardson - VP - Investor RelationsMatthew Meloy - CEOJennifer Kneale - PresidentWilliam Byers - Executive Vice President & CFOSpiro Dounis - DirectorMichael Blum - Managing DirectorScott Pryor - President, Logistics and TransportationManav Gupta - Executive DirectorRobert Muraro - Chief Commercial OfficerKeith Stanley - DirectorJohn Mackay - VP - Equity ResearchAndrew O'Donnell - Director - Equity ResearchPa ...