HOUSTON, May 01, 2025 (GLOBE NEWSWIRE) -- Targa Resources Corp. (NYSE: TRGP) (“TRGP,” the “Company” or “Targa”) today reported first quarter 2025 results. First quarter 2025 net income attributable to Targa Resources Corp. was $270.5 million compared to $275.2 million for the first quarter of 2024. The Company reported adjusted earnings before interest, income taxes, depreciation and amortization, and other non-cash items (“adjusted EBITDA”)(1) of $1,178.5 million for the first quarter of 2025 compared to $ ...

Industry Overview - The oil and energy sector is experiencing significant challenges in Q1 2025, with falling oil prices and slight increases in natural gas prices creating a complex outlook for growth [1][4] - Oil prices have sharply declined, with West Texas Intermediate crude averaging $71.84 per barrel, down from $77.56 a year ago, primarily due to weaker global economic growth and increased supply [2] - Natural gas prices have surged to an average of $4.15 per million British thermal units (MMBtu), up from $2.13 per MMBtu, driven by colder weather and rising LNG exports [3] Earnings Performance - Energy companies in the S&P 500 are projected to see a 12.9% decline in earnings year-over-year, although this is an improvement from the 22.4% decline in Q4 2024 [4][5] - Revenue for energy companies is expected to decline by 0.3%, contrasting with a 3.8% growth forecast for the broader S&P 500 [4] - Excluding the energy sector, the S&P 500's earnings would rise by 8.3%, indicating the significant drag energy is placing on overall results [5] Company-Specific Insights - TC Energy Corporation (TRP) is expected to report earnings of 72 cents per share, reflecting a 21.74% decrease from the previous year, with a low chance of an earnings beat due to an Earnings ESP of -0.35% and a Zacks Rank of 3 [8][10] - Targa Resources Corp. (TRGP) has a Zacks Consensus Estimate of $2.06 per share, indicating a 68.85% increase year-over-year, but also has a low chance of an earnings beat with an Earnings ESP of -4.12% and a Zacks Rank of 3 [10][12] - PBF Energy Inc. (PBF) is projected to report earnings of $3.24 per share, suggesting a significant 476.74% decrease from the prior year, with an Earnings ESP of 0.00% and a Zacks Rank of 3, indicating low chances for an earnings beat [12][13]

Wall Street analysts expect Targa Resources, Inc. (TRGP) to post quarterly earnings of $2.04 per share in its upcoming report, which indicates a year-over-year increase of 67.2%. Revenues are expected to be $5.73 billion, up 25.5% from the year-ago quarter.The consensus EPS estimate for the quarter has been revised 1.3% higher over the last 30 days to the current level. This reflects how the analysts covering the stock have collectively reevaluated their initial estimates during this timeframe.Prior to a co ...

Core Points - Targa Resources Corp. has declared an increase in its quarterly cash dividend to $1.00 per common share, which is an annualized rate of $4.00 per share, marking a 33% increase from the first quarter of 2024 [1] - The dividend will be paid on May 15, 2025, to shareholders on record as of April 30, 2025 [1] - The company will report its first quarter 2025 financial results on May 1, 2025, and will host a live webcast 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 [4] - The company operates a diversified portfolio of midstream infrastructure assets that are essential for the delivery of energy across the United States and to international markets [4] - Targa's operations include gathering, processing, transporting, and selling natural gas and natural gas liquids (NGLs), as well as crude oil services [4]

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]

Investment Rating - The report suggests a positive outlook for the aerospace and defense sectors, highlighting potential investment opportunities in companies like Howmet Aerospace, Loar Holdings, and Raytheon Technologies [6][7]. Core Insights - The AI data center sector is experiencing significant investment, with major companies like Microsoft and Meta planning to invest over $345 billion in AI infrastructure by 2025, indicating a potential bubble in the market [2][23]. - The aerospace industry is showing signs of recovery, with Airbus delivering approximately 70 aircraft in March, reflecting an 11% year-on-year increase [29]. - The defense sector is witnessing substantial contracts, such as Lockheed Martin receiving a $4.94 billion contract for precision strike missiles, indicating strong government spending in defense [35]. Summary by Sections Global Market Review - The U.S. stock market has shown a cautious sentiment, with the S&P 500 index declining over 1% recently, reflecting a risk-off attitude among investors [13]. Infrastructure - The AI data center sector is facing risks of overheating, with significant investments planned by major tech companies [23]. - The PJM Interconnection has released a reliability resource plan to ensure new power plants can connect to the grid efficiently [26]. - Poland is advised to delay the closure of coal plants to avoid a power shortage by 2030 [27]. Industrial Equipment - The price index for electric motors and generators in the U.S. has shown a year-on-year increase of 26% [20]. - China's transformer exports in early 2025 saw a significant increase of 48% year-on-year, indicating strong demand [57]. Energy - U.S. electricity prices have decreased by 35.5% recently, while the market for natural gas is showing mixed signals [5]. - The average spot price for uranium in the global market has decreased by 7.9% month-on-month [4]. Aerospace - The price index for aircraft engines and components has remained stable, with a year-on-year increase of 6.2% [31]. - The aerospace sector is actively pursuing sustainable development, facing challenges in achieving net-zero emissions [29]. Defense - The U.S. government defense spending price index has shown a year-on-year increase of 2.1% [36]. - The defense industry is experiencing a surge in contract awards, particularly in precision strike and unmanned systems [35].

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].