Targa Resources Corp.
Orin's own judgment of how firmly the evidence points one way — not the chance the price goes up.
Targa Resources continues to execute well operationally — FY2025 EPS of $8.52 grew 48.4% YoY, gross margin expanded to 26.5% from 20.0%, and Q2 2026 revenue rose 10.3% YoY to $4.44B with a 25.1% EPS beat — but the stock at $294.90 trades at 28.0x earnings, a 74.4% premium to the peer median of 16.1x, and 17.3x EV/EBITDA, 45.6% above peers, pricing in sustained perfection.
Free cash flow has compressed for four straight years to $584M against $3.33B in capex and $17.55B in total debt as of FY2025, while insiders remain persistent net sellers with $40.8M in dispositions over 24 months and smart money sits slightly negative at -0.02 as of the quarter ended 30 Jun. Technicals are constructive with price above both the 50-day ($285.55) and 200-day ($253.53) MAs and a positive MACD histogram of 1.01, but the combination of extreme valuation, deteriorating FCF, and insider selling keeps the risk/reward balanced rather than compelling.
What could go wrong
- Valuation premium unsustainable. At 28.0x PE (74.4% above peer median 16.1x) and 17.3x EV/EBITDA (45.6% above peer median 11.9x), any earnings miss or growth deceleration could trigger a sharp de-rating.
- Declining FCF despite rising capex and debt. FCF has fallen from $1.80B in FY2021 to $584M in FY2025 while capex grew to $3.33B and total debt reached $17.55B, limiting financial flexibility.
- Persistent insider selling. Over 24 months, insiders executed 28 dispositions and zero open-market acquisitions, netting -$188,755 shares worth -$40.8M, with selling continuing into September 2026.
- Institutional outflows. Smart money score is -0.02 as of the quarter ended 30 Jun, and recent 13F filings show funds like Banque Pictet and Chickasaw Capital reducing positions in Q3 2026.
What would change my mind
Where this comes from: FY25 fundamentals · FY24 and FY25 fundamentals · Q2 2026 results · earnings vs estimates, 6 Aug. Orin's read on TRGP; not advice.
How has the share price moved?
Up 96.5% over twelve months, from $153.98 on 27 Oct 2025 to $302.61 at the Tue 27 Oct 2026 close. Its highest close in that time was $304.68 on 26 Oct 2026; the last close is 0.7% below it.
- Green line: the closing price each trading day.
- Grey line: the average closing price over the last 50 trading days.
- Dashed amber line: the same over the last 200 trading days — a slower, smoother line.
- Bars along the bottom: shares traded each day — green when it closed higher than the day before, rose when lower (the most, 4.3M, on 19 Dec 2025).
- Flags: the company's filings, on the day they were made (a 10-Q is the quarterly report and a 10-K the annual report; an 8-K reports a major event).
On file
All TRGP filingsLargest holders · 13F Q2 2026
Money flow| Filer | Position | Of fund |
|---|---|---|
| BlackRock | $5.6B | 0.1% |
| State Street | $3.8B | 0.1% |
| Wellington Management Group | $3.8B | 0.7% |
| Vanguard Capital Management | $3.8B | 0.1% |
| Vanguard Portfolio Management | $3.1B | 0.1% |
| Harris Associates | $2.1B | 2.8% |
| Geode Capital Management | $1.6B | 0.1% |
| Norges Bank | $1.1B | 0.1% |
| Blackstone | $965.8M | 2.9% |
| Morgan Stanley | $954.4M | 0.1% |
101 of the 815 filers we track · quarter ended Q2 2026 · positions, not flows
Insiders, last 24 months: 87 Form 4 filings; open-market trades net −$40.8M. 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 →How is it priced, against its own past and its sector?
Priced at 23.9× its last 12 months of profit (Thu 5 Nov close) — higher than in 3 of the 4 of its last 5 fiscal years with a P/E (middle 22.6×); the typical Energy company on the NYSE is at 17.6×.
| Measure | Now | Its usual | Sector |
|---|---|---|---|
| P/E | 23.9×above usual | 22.6× | 17.6× |
| P/S | 3.20×above usual | 1.25× | — |
| EV/EBITDA | 15.2×above usual | 10.9× | — |
| P/B | 15.3×above usual | 7.1× | — |
- "Its usual" is the middle of its own last 5 fiscal years.
P/E: the share price divided by one year of profit per share — roughly how many years of today's profit the price pays for. A company that loses money has no P/E.
P/S: the company's total market value divided by one year of revenue. Used when there is no profit to measure.
EV/EBITDA: the price of the whole company (its shares plus its debt, minus its cash) divided by one year of operating profit before interest, tax and write-downs.
P/B: the share price divided by the book value per share — what the company owns minus what it owes, as its accounts record it. When book value is tiny, P/B swings wildly and says little.
What do the analysts who cover it publish?
The analysts' average 12-month price target is $329 (from $294 to $359) — 9% above the Tue 27 Oct close price. That is their published opinion, not Orin's.
$329
$294 – $359 · +9% against the last close
- 15 buy or overweight
- 1 hold
- 0 underweight or sell
Price target: the share price an analyst publishes for about 12 months ahead. It is the opinion of the firm that wrote it; the average is across the firms that cover the company.
Overweight / underweight: analysts' rating words: overweight means the firm expects the stock to do better than the others it covers, underweight worse. Their words, not Orin's.
How is it priced next to the companies it is compared to?
Priced at 23.9× its last 12 months of profit; the middle P/E of the 6 companies it is compared to that made a profit is 17.2×.
| Company | Market value | P/E | EV/EBITDA | Gross margin | Net margin | ROE |
|---|---|---|---|---|---|---|
| TRGPTarga Resources Corp. | $58B | 23.9× | 15.2× | 39.5% | 13.5% | 72% |
| DKLDelek Logistics Partners, LP | $3B | 17.9× | 6.2× | 11.8% | 11.9% | n/m |
| KMIKinder Morgan, Inc. | $75B | 20.9× | 14.0× | 56.7% | 19.6% | 11% |
| NGLNGL Energy Partners LP | $2B | lost money | 4.0× | 41.4% | −6.4% | −24% |
| OKEONEOK, Inc. | $61B | 16.5× | 11.8× | 21.8% | 9.3% | 16% |
| PAAPlains All American Pipeline, L.P. | $19B | 7.3× | 8.5× | 4.5% | 5.3% | 27% |
| WESWestern Midstream Partners, LP | $16B | 12.7× | 10.8× | 65.0% | 27.7% | 32% |
| WMBThe Williams Companies, Inc. | $91B | 29.4× | 15.8× | 73.6% | 25.2% | 24% |
- NGL: lost money over the last 12 months, so no P/E.
- DKL: return on equity is not meaningful (n/m) — book value is below zero.
- The list of companies is the data vendor's choice, so it can include a company a person would not have picked.
Market value: the share price times the number of shares — what the whole company is priced at.
P/E: the share price divided by one year of profit per share — roughly how many years of today's profit the price pays for. A company that loses money has no P/E.
EV/EBITDA: the price of the whole company (its shares plus its debt, minus its cash) divided by one year of operating profit before interest, tax and write-downs.
Gross margin: the share of each $1 of sales left after the direct cost of making what was sold.
Net margin: the share of each $1 of sales kept as profit after every cost. Below zero, the company lost money.
ROE: return on equity: one year of profit as a share of the shareholders' money in the business (its book value).
Is it priced high or low compared with its own past?
Priced at 23.9× its last 12 months of profit (Thu 5 Nov close). It has no full fiscal year on file since its history starts, so there is nothing of its own to compare with.
- Now23.9×
P/E: the share price divided by one year of profit per share — roughly how many years of today's profit the price pays for. A company that loses money has no P/E.
Fiscal year (FY): the company's own 12-month accounting year, which need not match the calendar year.
How has its sector been priced?
Energy companies on the NYSE were priced at a typical 17.6× their yearly profit (Tue 27 Oct close).
- Now17.6×
- Each year is the middle of that calendar year's daily sector P/E; "Now" is the Tue 27 Oct close figure, the same one in the table above.
Sector P/E: the middle P/E of the companies in the same sector on the same stock exchange, as the data vendor works it out each day.
What does a cash-flow model say a share is worth?
A standard cash-flow model puts it at $7 a share — 98% below the $302.72 price it was computed against (27 Oct).
| Model | Value a share | Against the price then |
|---|---|---|
| Levered | $7 | 98% below $302.72 |
- Standard: comes out below zero, so it is not shown.
Discounted cash flow: a model's estimate of what the company is worth today, from the cash it is forecast to make in future years. Small changes in the forecast move it a lot, and it says little about a company that loses money.
Standard / levered: two versions of the cash-flow model: the standard one counts the cash before the company pays its lenders, the levered one after.