Targa Resources Corp. TRGP
Targa Resources' FY2025 results show genuine operational leverage — EPS grew 48.4% to $8.52 and gross margin expanded to 26.5% from 20.0% — while the 20-year ExxonMobil agreements announced in August 2026 anchor long-term Permian growth through 2046. However, at $294 the stock trades at 27.9x earnings (a 136% premium to the peer median) and 17.3x EV/EBITDA (112% above peers), even as free cash flow has compressed for three consecutive years to $584M with capex at $3.3B and total debt at $17.5B against just $3.1B of equity.
With insiders net sellers at ~$70M over 24 months and smart money scores declining from 0.1754 to 0.0724 as of the quarter ended 2026-06-30, the current valuation leaves no margin of safety despite the improving operational story.
What could go wrong
- Capex-driven FCF erosion. Free cash flow has declined for three straight years to $584M as capex climbed to $3.3B; the ExxonMobil agreements require additional infrastructure spending that could further delay FCF inflection.
- Leverage and balance sheet. Total debt reached $17.5B against just $3.1B of stockholders' equity, creating a debt-to-equity ratio above 5x and limiting financial flexibility if commodity markets weaken.
- Valuation premium compression. At 27.9x P/E and 17.3x EV/EBITDA — 136% and 112% above peer medians respectively — any disappointment in execution or Permian volume growth could trigger multiple contraction toward peers.
- Insider and smart money divergence. Insiders have been net sellers at ~$70M over 24 months, and smart money scores have declined from 0.1754 to 0.0724 as of Q2 2026, suggesting those closest to the business see limited upside at current prices.
What would change my mind
Where this comes from: FMP annual fundamentals + derived_metrics FY2025 · derived_metrics FY2025 vs FY2024 · Zacks and ETF Trends news articles, 2026-08-21 · peer_relative snapshot. Orin's read on TRGP; not advice.
Twelve months actual closes to 2026-09-23 · actual filings
50-day average 200-day average · volume below
On file
All TRGP filingsLargest holders · 13F Q2 2026
Money flow| Filer | Position | Of fund |
|---|---|---|
| Brasada Capital Management | $6.9B | 1.2% of fund |
| State Street | $3.8B | 0.1% of fund |
| Wellington Management Group Llp | $3.8B | 0.7% of fund |
| Vanguard Capital Management | $3.8B | 0.1% of fund |
| Vanguard Portfolio Management | $3.1B | 0.1% of fund |
| Harris Associates L P | $2.1B | 2.8% of fund |
98 filers · quarter ended Q2 2026 · positions, not flows
Insiders, last 24 months: 87 Form 4 filings, net −$72.2M. Of the 50 on hand, 0 were open-market purchases and 23 sales— the rest are grants, option exercises and tax withholding.
Ask Orin about TRGP
Orin answers questions about TRGP from its filings, transcripts and numbers — with the source behind every claim. Your own desk starts with 3 free days, card required.
Start 3 free days →Where it trades
| Metric | Now | Own median | Sector |
|---|---|---|---|
| P/E | 26.9× | 23.6× | 51.1× |
| EV/EBITDA | 16.8× | 10.8× | — |
| P/S | 3.62× | 1.25× | — |
| P/B | 16.6× | 7.1× | — |
Its P/E sits 60th percentile of its own last 5 years (−0.43σ from its own mean).
30.5%
free-cash-flow growth every year for 10 years, discounted at 10%, is what today’s price implies — starting from $0.6B of trailing free cash flow. It is an assumption the market is making, not a forecast Orin is making.
What Wall Street published
$319
$268 – $359 · +13% against today's price
- 28 buy or overweight
- 6 hold
- 0 underweight or sell
The analysts’ consensus and their own ratings, not Orin’s. A target is a twelve-month opinion published by the firm that wrote it.
Against the companies it is compared to
| Company | Market cap | P/E | EV/EBITDA | Gross | Net | ROE |
|---|---|---|---|---|---|---|
| TRGPTarga Resources Corp. | $61B | 26.9× | 16.8× | 36.6% | 13.5% | 72% |
| EQTEQT Corporation | $32B | 11.2× | 6.1× | 68.4% | 30.7% | 12% |
| FANGDiamondback Energy, Inc. | $52B | 36.3× | 9.0× | 44.5% | 9.3% | 4% |
| OKEONEOK, Inc. | $57B | 15.6× | 11.4× | 21.8% | 9.3% | 16% |
| OXYOccidental Petroleum Corporation | $57B | 8.6× | 4.8× | 43.4% | 28.8% | 19% |
| PAAPlains All American Pipeline, L.P. | $17B | 6.8× | 8.1× | 4.5% | 5.3% | 27% |
The median is of the 5 peers listed above and nothing else — check it against the column. This company trades 139.4% above it. The peer set is the vendor’s, so a company can appear here that a person would not have chosen.
What it has traded at
What its sector has traded at
Two scales, drawn separately on purpose: a sector median and one company’s multiple are not the same number and putting them on one axis invites a comparison neither series supports.
Discounted cash flow
| Model | Fair value | Against | Computed |
|---|---|---|---|
| Standard DCF | $-45 | $273.79 · −116% | 2026-06-10 |
| Levered DCF | $19 | $273.79 · −93% | 2026-06-10 |
The vendor’s intrinsic-value models. Treat them as a low-growth anchor — for a fast grower the market routinely pays well above a DCF. These were computed against the price in the “against” column, not today’s.
Every estimate on one scale
The vertical rule is the current price. Ranges and point estimates are the backend’s, published as they were calculated; an arrow means the estimate sits beyond this scale, and its number is on the right.