HOUSTON, April 10, 2025 (GLOBE NEWSWIRE) -- Targa Resources Corp. (NYSE: TRGP) ("Targa" or the "Company") announced today that its board of directors has declared an increase to its quarterly cash dividend to $1.00 per common share, or $4.00 per common share on an annualized basis, for the first quarter of 2025, consistent with previously disclosed expectations. This dividend represents a 33 percent increase over the common dividend declared with respect to the first quarter of 2024. This cash dividend will ...

Group 1 - Targa Resources, Inc. (TRGP) shares increased by 8.2% to $173.65, following a significant trading volume, contrasting with an 11.4% loss over the past four weeks [1] - The rise in Targa's stock price is attributed to the increase in natural gas prices, which followed the upward trend in oil prices, and a broader market rally due to President Trump's tariff policy changes [2] - The company is expected to report quarterly earnings of $2.04 per share, reflecting a year-over-year increase of 67.2%, with revenues projected at $5.58 billion, up 22.4% from the previous year [3] Group 2 - The consensus EPS estimate for Targa Resources has been revised 4.1% higher in the last 30 days, indicating a positive trend that typically leads to price appreciation [4] - Targa Resources is classified under the Zacks Oil and Gas - Refining and Marketing - Master Limited Partnerships industry, with a current Zacks Rank of 3 (Hold) [4] - Global Partners LP (GLP), another company in the same industry, saw its stock rise by 8% but has a negative return of -17.9% over the past month [4]

Core Insights - Targa Resources Corp. (TRGP) has seen a significant 29.1% increase in its share price over the past six months, outperforming the broader oil and energy sector, which remained stagnant at 0% [1] - The company has achieved record adjusted EBITDA of $4.1 billion in 2024, reflecting a 17% year-over-year increase, driven by strong operations in its Permian, NGL transportation, fractionation, and LPG export businesses [7] - TRGP's revenue model is predominantly fee-based, with over 90% of expected 2025 revenues coming from contracts that insulate the company from commodity price volatility [9] Company Overview - Targa Resources Corp. specializes in natural gas services, including gathering, processing, compressing, treating, and selling, with a strategic location in Mont Belvieu, TX, which is home to the world's largest natural gas liquids hub [4] - The company operates with a fractionation capacity of approximately 938,000 barrels per day and has advanced LPG export facilities at its Galena Park Marine Terminal [5] Growth Drivers - TRGP is expanding its infrastructure with major projects such as the Delaware Express pipeline expansion and the GPMT LPG Export Expansion, backed by a capital investment of $2.6 billion to $2.8 billion in 2025 [8] - The company is well-positioned to benefit from increasing global demand for U.S. NGLs and LNG, with record pipeline transportation and export volumes in 2024 [10][11] Market Position - Targa's infrastructure, including pipelines and processing plants, is strategically aligned to meet the growing global demand for U.S. natural gas liquids, which are essential for petrochemical and industrial applications [11] - The company’s investments in high-growth regions like the Permian Basin are expected to enhance its market share as energy markets evolve [11] Financial Performance - The record-high financial performance of TRGP showcases its ability to generate stable cash flows, making it an attractive investment in the midstream energy sector [7] - The company's strong demand for NGLs and LNG exports positions it favorably in an expanding global energy market [10] Risks and Challenges - TRGP faces potential regulatory and environmental uncertainties, including new emissions regulations and policies favoring renewable energy, which could impact future expansions [12] - Increasing competition in the NGL export market poses risks to pricing and margins, necessitating the need for long-term contracts to avoid overcapacity [13] - The company's high EV/EBITDA ratio of 14.39 compared to the sub-industry average of 10.95 raises concerns about valuation sustainability [15]

Core Insights - Targa Resources Corp. (TRGP) reported fourth-quarter 2024 adjusted earnings of $1.44 per share, missing the Zacks Consensus Estimate of $1.88, but showing an increase from $1.23 in the same quarter last year, driven by strong NGL sales [1] - Total quarterly revenues rose to $4.4 billion from $4.2 billion year-over-year, exceeding the Zacks Consensus Estimate of $4.1 billion, attributed to higher commodity sales and increased midstream service fees [2] - The company's adjusted EBITDA for the fourth quarter reached $1.1 billion, up from $959.9 million in the prior-year period [3] Financial Performance - Targa declared a quarterly cash dividend of 75 cents per common share for Q4 2024, amounting to approximately $164 million distributed to shareholders [4] - The company repurchased 610,683 shares at an average price of $176.86 per share, spending about $108 million, with over $1 billion remaining in its share repurchase program as of December 31, 2024 [5] - Targa reported record full-year and fourth-quarter volumes in Permian, NGL transportation, fractionation, and LPG exports, with significant new projects completed [6][7] Segment Performance - The Gathering and Processing segment had an operating margin of $598.9 million, up 11.75% year-over-year, but below the consensus estimate of $620 million, with Permian Basin volumes increasing 14.9% to an average of 6,065.2 MMcf/d [8] - The Logistics and Transportation segment's operating margin was $656.2 million, an 18.4% increase year-over-year, surpassing the Zacks Consensus Estimate of $624 million, driven by higher pipeline transportation and fractionation volumes [9] - Fractionation volumes totaled 1,089.5 thousand barrels per day, a 29% increase from the previous year, exceeding the consensus estimate of 1,023 thousand barrels per day [10] Costs and Capital Expenditures - Targa incurred product costs of $2.9 billion in Q4, a marginal increase of 1% year-over-year, while operating expenses rose 13% to $305.8 million [12] - The company spent $819.7 million on growth capital programs, compared to $636 million in the prior-year period [12] - As of December 31, 2024, Targa had cash and cash equivalents of $157.3 million and long-term debt of $13.8 billion, with a debt-to-capitalization ratio of approximately 76.2% [13] 2025 Guidance - For 2025, Targa projects full-year adjusted EBITDA between $4.65 billion and $4.85 billion, reflecting a 15% increase compared to 2024, with expectations of record growth in Permian G&P operations [14] - Estimated net growth capital expenditures for 2025 are projected to be between $2.6 billion and $2.8 billion, with maintenance capital expenditures around $250 million [15] - Targa plans to propose a 33% increase in its quarterly common dividend to $1.00 per share for Q1 2025, pending board approval [16]

Core Viewpoint - Investors are increasingly seeking growth stocks that demonstrate above-average growth potential, with Targa Resources, Inc. (TRGP) being highlighted as a strong candidate due to its favorable growth metrics and Zacks Rank [1][2]. Group 1: Earnings Growth - Targa Resources has a historical EPS growth rate of 70.2%, with projected EPS growth of 44.1% for the current year, surpassing the industry average of 36.7% [4]. - Double-digit earnings growth is preferred by growth investors as it indicates strong future prospects and potential stock price increases [3]. Group 2: Cash Flow Growth - The company exhibits a year-over-year cash flow growth of 24.7%, significantly higher than the industry average of -9.4% [5]. - Over the past 3-5 years, Targa Resources has maintained an annualized cash flow growth rate of 24.2%, compared to the industry average of 11.5% [6]. Group 3: Earnings Estimate Revisions - There is a positive trend in earnings estimate revisions for Targa Resources, with the current-year earnings estimates increasing by 1.9% over the past month [7]. - A strong correlation exists between earnings estimate revisions and near-term stock price movements, making this trend a positive indicator for investors [7]. Group 4: Overall Assessment - Targa Resources has achieved a Growth Score of A and a Zacks Rank of 2, indicating it is a solid choice for growth investors and a potential outperformer in the market [9].

Core Viewpoint - Targa Resources, Inc. (TRGP) has received a Zacks Rank 2 (Buy) upgrade due to an upward trend in earnings estimates, indicating a positive earnings outlook that may lead to increased stock prices [1][3]. Earnings Estimates and Stock Price Movement - Changes in a company's future earnings potential, as reflected in earnings estimate revisions, are strongly correlated with near-term stock price movements [4]. - Institutional investors utilize earnings estimates to determine the fair value of a company's shares, influencing their buying and selling decisions, which in turn affects stock prices [4]. Business Improvement Indicators - The rising earnings estimates and the Zacks Rank upgrade suggest an improvement in Targa Resources' underlying business, which is expected to drive the stock price higher [5]. Earnings Estimate Revisions - Targa Resources is projected to earn $8.27 per share for the fiscal year ending December 2025, reflecting a year-over-year increase of 44.1% [8]. - Over the past three months, the Zacks Consensus Estimate for Targa Resources has increased by 1.2% [8]. Zacks Rank System - The Zacks Rank system classifies stocks based on earnings estimates, with only the top 20% of stocks receiving a 'Strong Buy' or 'Buy' rating, indicating superior earnings estimate revision features [9][10]. - Targa Resources' upgrade to Zacks Rank 2 places it in the top 20% of Zacks-covered stocks, suggesting potential for market-beating returns in the near term [10].

Operational Risks - The company operates predominantly on fee-based arrangements for its Gathering and Processing and Logistics and Transportation businesses, which exposes it to commodity price risks under certain agreements[164]. - A reduction in demand for NGL products could materially adversely affect the company's business, results of operations, and financial condition[165]. - The company faces competitive pressures from larger companies with greater financial resources, which could adversely affect its ability to maintain current revenues and cash flows[176]. - The company relies on third-party pipelines and facilities for transportation, and any unavailability could adversely affect its revenues[179]. - The natural decline in production from existing wells means the company must continually secure new sources of natural gas, NGLs, and crude oil to maintain throughput levels[172]. - The company does not own most of the land on which its pipelines and facilities are located, which could disrupt operations if rights of way or leases are not renewed[182]. - Weather events may damage the company's infrastructure and increase operational costs, adversely impacting its business and financial condition[185]. - The company faces significant operational risks due to weather events, which may lead to disruptions and adverse effects on throughput and financial condition[186]. - Rising sea levels and erosion could damage pipeline infrastructure, potentially resulting in significant repair costs and impacting service provision[187]. - The company may incur substantial costs for weatherization of facilities to comply with new regulations, which could affect financial performance[188]. - Increased maintenance and repair expenditures are anticipated due to the aging pipeline systems, which could materially impact revenue[192][193]. Management and Personnel Risks - The company’s success is dependent on its named executive officers, and losing any of them could harm its business strategies[184]. Financial Risks - The company’s revenues and cash flows are sensitive to fluctuations in energy prices, which can affect production rates and investments by third parties[175]. - The company does not obtain independent evaluations of reserves connected to its gathering systems, leading to potential discrepancies in future volume expectations[181]. - The company is exposed to credit risks from customers, with potential nonpayment affecting cash flow and the ability to pay dividends[222]. - Hedging activities may not effectively reduce cash flow variability and could expose the company to increased commodity price risks[228]. - The company evaluates long-lived assets for impairment, which could lead to material charges affecting financial statements if energy industry conditions deteriorate[227]. - The company’s ability to service its debt will depend on future financial and operating performance, which may be affected by economic conditions[261]. - The company may not be able to maintain or increase cash dividend levels if it incurs additional debt or issues more shares[233]. - The company’s substantial level of indebtedness increases the risk of being unable to generate sufficient cash to meet debt obligations[258]. - Debt agreements impose significant operating and financial restrictions, including limitations on incurring additional indebtedness and paying dividends[264]. - A breach of covenants could lead to an event of default, requiring immediate repayment of outstanding amounts[266]. Regulatory and Compliance Risks - Regulatory changes, such as the "Gas Mega Rule," may require additional capital projects and increase operating costs, adversely affecting financial results[200][202]. - The company is subject to cybersecurity risks that could lead to operational disruptions and financial losses[203][204]. - The company is subject to stringent regulations regarding GHG emissions, with a methane emissions fee starting at $900 per ton in 2024, increasing to $1,500 by 2026[269]. - New EPA methane rules finalized in December 2023 may increase operating costs and affect financial results[270]. - Future regulatory changes could increase compliance costs and reduce demand for oil and natural gas, adversely affecting the company's business[277]. - The company is subject to various environmental laws and regulations, and failure to comply could result in substantial liabilities and increased operational costs[286]. - Stricter regulations, such as the EPA's Good Neighbor Plan, could reduce demand for the company's products and accelerate the transition away from oil and gas[288]. - Uncertainty regarding the Clean Water Act's jurisdictional reach may lead to delays and increased compliance costs for the company's operations[289]. - Legal challenges to Nationwide Permit 12 could result in increased costs and project delays for the company[290]. - Changes in regulatory characterization of assets may lead to increased operating expenses and reduced revenues[291]. - The company must maintain compliance with FERC regulations, with potential penalties for violations reaching approximately $1.6 million per day[297]. - The company operates under various federal and tribal regulations that may increase operational costs and impact its ability to conduct business on tribal lands[295]. - FERC's policies may indirectly affect the natural gas and liquids markets, impacting the company's operations and market access[296]. Sustainability and Environmental Risks - Institutional investors are increasingly focused on sustainability, which may affect capital availability for fossil fuel companies[276]. - The company has established a Sustainability Committee to oversee sustainability practices and published its 2023 Sustainability Report[281]. - The company may face reputational damage and litigation risks if it fails to meet sustainability targets and initiatives[281]. - Increased scrutiny from investors and regulators regarding sustainability practices may lead to litigation risks and negative sentiment, impacting investment and operational decisions[283]. - The company faces significant costs related to compliance with stringent occupational safety and health requirements, which could adversely affect its financial condition and results of operations[284]. - The company is subject to increasingly complex cybersecurity and data privacy laws, which may elevate compliance costs over time[298]. - Texas has enacted data privacy legislation that could impact the company's operations and compliance expenses[298]. - The company collects and processes personal information of employees, investors, contractors, suppliers, and customer contacts, which poses compliance challenges[298]. - Significant resources may be required to modify or enhance protective measures in response to evolving legislation and cyber incidents[298]. - Non-compliance with cybersecurity and data privacy laws could result in reputational harm, loss of goodwill, and financial penalties[298]. Growth and Investment Risks - Future growth is contingent on the successful development of growth projects and acquisitions; failure to do so may limit cash flow and shareholder returns[208]. - The company must effectively integrate acquired assets to avoid adverse impacts on financial condition and operational results[209]. - Risks associated with growth projects include difficulties in asset assimilation, unexpected costs, and failure to achieve anticipated revenues and synergies[210]. - A reduction in divestitures of energy assets could limit opportunities for future growth projects and adversely affect cash flows available for dividends[212]. - Construction of new midstream assets may require substantial capital investment and could be delayed, impacting revenue generation timelines[207]. - Inflationary pressures have resulted in increased costs for goods and services, impacting capital expenditures and operating costs[223]. - Future tax liability may be greater than expected if NOL carryforwards are limited or if tax authorities challenge certain tax positions[235]. - The company has outstanding net derivative positions with credit-risk related contingent features in a net liability position of $138.2 million as of December 31, 2024[260]. - As of December 31, 2024, the company has U.S. federal NOL carryforwards of $4.7 billion, which do not expire under current tax laws[236]. - The company’s long-term unsecured debt is rated "BBB" by Fitch, "Baa2" by Moody's, and "BBB" by S&P as of December 31, 2024[259]. - The Dodd-Frank Act and related regulations could increase the cost of derivative contracts, potentially affecting the company's financial condition[247].

Financial Data and Key Metrics Changes - Targa Resources reported a record adjusted EBITDA of $4.1 billion for 2024, a 17% increase compared to 2023, driven by strong operational metrics despite weak natural gas and NGL prices [13][37] - The fourth quarter adjusted EBITDA was $1.122 billion, reflecting a 5% increase from the third quarter, attributed to higher Permian volumes [36][37] - The company expects 2025 adjusted EBITDA to be between $4.65 billion and $4.85 billion, representing a 15% increase over 2024 [39] Business Line Data and Key Metrics Changes - Permian GMP volumes grew by 14% year-over-year in 2024, with an incremental 709 million cubic feet per day moving through the system [11] - NGL pipeline transportation volumes averaged a record during the fourth quarter, with fractionation volumes also reaching a record of 1.1 million barrels per day [21] - The logistics and transportation segment is expected to benefit from full-year contributions of the Daytona NGL pipeline and trains nine and ten [40] Market Data and Key Metrics Changes - The company anticipates continued volume growth in the Permian Basin, which will drive operating margins across its businesses [40] - The outlook for NGL supply growth remains robust, supported by downstream system expansions to handle growth from the Permian systems [22] Company Strategy and Development Direction - Targa Resources announced three new projects aimed at expanding NGL capacity, including the Delaware Express pipeline and new fractionators [9][10] - The company is focused on maintaining a strong balance sheet while investing in organic growth opportunities and returning capital to shareholders [34][15] - Targa's strategy includes opportunistic share repurchases and significant dividend increases, with a 33% increase in the annualized 2025 common dividend per share expected [14][33] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the company's growth trajectory, highlighting strong commercial success and increased infrastructure investments [7][12] - The company expects to see significant volume growth in 2026, driven by the addition of four new Permian plants [12][14] - Management acknowledged weather-related challenges in Q1 but remains optimistic about the overall growth outlook for 2025 and beyond [52] Other Important Information - Targa completed the purchase of BP's 12% interest in Cedar Bayou Fractionators for approximately $111 million, now owning 100% of the asset [25] - The company also announced a definitive agreement to repurchase all outstanding preferred equity in Targa Badlands LLC for approximately $1.8 billion, enhancing its financial flexibility [26][27] Q&A Session Summary Question: Forward outlook and EBITDA trajectory - Management indicated a strong growth outlook for 2025, with expectations for more back-half growth and significant contributions from commercial deals [50][52] Question: Badlands buy-in clarification - Management confirmed the decision was opportunistic, driven by a strong balance sheet and the potential for $80 million in annual cash savings [62] Question: Capital allocation priorities - Management emphasized an all-of-the-above approach, balancing organic growth investments with opportunistic share repurchases and dividend increases [66][70] Question: Commercial success across footprint - Management noted good commercial success in both the Midland and Delaware basins, with significant activity and acreage positions available [76][78] Question: Expected returns on new projects - Management affirmed that the previously guided five and a half times build multiple remains a reasonable starting point for modeling [104] Question: North Texas Mountain Valley NGL pipeline timing - Management discussed the need for new capital and the ongoing evaluation of additional long-haul pipe projects to support growth [128][131]

Fourth Quarter and Full Year 2024 Earnings Supplement February 20, 2025 | TARGA RESOURCES CORP. Forward Looking Statements Certain statements in this presentation are "forward-looking statements" within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. All statements, other than statements of historical facts, included in this presentation that address activities, events or developments that the Company expects, believes ...

Financial Performance - Fourth quarter 2024 net income attributable to Targa Resources Corp. was $351.0 million, up from $299.6 million in Q4 2023, while full year 2024 net income was $1,312.0 million, down from $1,345.9 million in 2023[2]. - Full year 2024 adjusted EBITDA reached a record $4.1 billion, a 17% increase compared to 2023, with fourth quarter adjusted EBITDA of $1.1 billion[6]. - Revenues for Q4 2024 were $4,405.2 million, a 4% increase from $4,239.5 million in Q4 2023, driven by higher commodity sales and midstream service fees[21]. - Adjusted EBITDA for Q4 2024 was $1,122.2 million, a 17% increase from $959.9 million in Q4 2023[21]. - Net income attributable to common shareholders for Q4 2024 was $318.1 million, a 14% increase from $280.2 million in Q4 2023[21]. - For the year ended December 31, 2024, commodity sales were relatively flat, reflecting lower natural gas and condensate prices of $1,242.8 million and unfavorable hedging impacts of $686.5 million[27]. - The total operating margin for the year ended December 31, 2024, was $2,312.4 million, an increase of 11% from $2,082.2 million in 2023[35]. - Operating margin for the year ended December 31, 2024, reached $2,355.1 million, reflecting a 21% increase from $1,948.7 million in 2023[44]. - Adjusted Cash Flow from Operations for the year ended December 31, 2024, was $3,372.4 million, compared to $2,840.6 million in 2023, reflecting an 18.7% increase[62]. Dividends and Share Repurchases - Targa declared a quarterly cash dividend of $0.75 per common share for Q4 2024, totaling approximately $164 million, and intends to recommend an annual dividend of $4.00 per share for 2025[4]. - The company repurchased 610,683 shares in Q4 2024 at a total cost of $108.0 million, and 5,933,050 shares for $754.7 million throughout 2024[5]. - Targa expects to increase its quarterly common dividend to $1.00 per share in Q1 2025, a 33% increase if approved[18]. Capital Expenditures and Growth Plans - The company plans net growth capital expenditures of $2.6 billion to $2.8 billion for 2025, including expansions in the Delaware Basin and Mont Belvieu[17]. - New projects include the Delaware Express pipeline expansion and a new 150 MBbl/d fractionator (Train 12) in Mont Belvieu, expected to commence operations in 2026 and 2027 respectively[13][14]. - Estimated net income for 2025 is projected at $1,765.0 million, with estimated Adjusted EBITDA expected to be $4,750.0 million[64]. - Growth capital expenditures for the year ended December 31, 2024, totaled $3,000.4 million, compared to $2,224.5 million in 2023, marking a 34.9% increase[62]. Debt and Liquidity - Targa's total consolidated debt as of December 31, 2024, was $14.2 billion, with total consolidated liquidity of approximately $2.0 billion[8][9]. - Targa announced a refinancing of preferred equity in Targa Badlands LLC for $1.8 billion, expected to close in Q1 2025, resulting in cash savings[11]. - Interest expense for the year ended December 31, 2024, was $752.4 million, up from $675.8 million in 2023, which is an increase of 11.3%[62]. Operational Highlights - The Gathering and Processing segment includes assets located in key regions such as the Permian Basin, Eagle Ford Shale, and Williston Basin, focusing on natural gas and crude oil operations[34]. - Natural gas inlet volumes in the Permian increased by 15% to 6,065.2 MMcf/d in Q4 2024 from 5,280.8 MMcf/d in Q4 2023, driven by new plant additions[35]. - The total NGL production increased by 14% to 959.8 MBbl/d in Q4 2024 compared to 838.5 MBbl/d in Q4 2023[35]. - NGL pipeline transportation volumes increased by 21% to 871.5 MBbl/d in Q4 2024, compared to 722.0 MBbl/d in Q4 2023[44]. - Fractionation volumes rose by 29% to 1,089.5 MBbl/d in Q4 2024, up from 844.8 MBbl/d in Q4 2023[44]. - Export volumes for Q4 2024 were 457.1 MBbl/d, a 5% increase from 434.5 MBbl/d in Q4 2023[44]. Market Conditions and Future Outlook - The company anticipates continued growth in volumes on its systems, influenced by market conditions and capital project completions[67]. - Targa Resources emphasizes the importance of monitoring market conditions and uncertainties that could impact future performance, including commodity price volatility and economic factors[67].