Targa Resources (TRGP) Upgraded to Buy: Here's Why

Core Viewpoint - Targa Resources, Inc. (TRGP) has been upgraded to a Zacks Rank 2 (Buy) due to an upward trend in earnings estimates, which is a significant factor influencing stock prices [1][3]. Earnings Estimates and Stock Price Movement - The Zacks rating system is based on the consensus measure of EPS estimates from sell-side analysts, reflecting the company's changing earnings picture [1][2]. - Changes in earnings estimates are strongly correlated with near-term stock price movements, influenced by institutional investors who adjust their valuations based on these estimates [4]. Implications of the Upgrade - The upgrade for Targa Resources indicates a positive outlook on its earnings, which is expected to create buying pressure and potentially increase the stock price [3][5]. - Rising earnings estimates suggest an improvement in the company's underlying business, which should be recognized by investors, leading to a higher stock price [5]. Earnings Estimate Revisions - For the fiscal year ending December 2025, Targa Resources is projected to earn $7.97 per share, unchanged from the previous year, but the Zacks Consensus Estimate has increased by 7.7% over the past three months [8]. Zacks Rank System - The Zacks Rank system classifies stocks into five groups based on earnings estimates, with a strong historical performance, particularly for Zacks Rank 1 stocks, which have generated an average annual return of +25% since 1988 [7]. - Targa Resources' upgrade to Zacks Rank 2 places it in the top 20% of Zacks-covered stocks, indicating a strong potential for market-beating returns in the near term [10].