TD Cowen upgraded Targa Resources to Buy from Hold and raised its price target to $350 from $275, sending the oil and gas infrastructure company's shares up 3.3% in Friday's trading. Analyst Jason Gabelman cited expected Permian Basin wet gas growth and peer-leading EBITDA growth, saying Targa has grown its Permian gas processing volumes faster than underlying robust Permian gas growth, a trend he expects to continue on producer activity and expanding gas-to-oil ratios. He forecast 17 new processing plants through 2030 and two plants per year beyond 2030, underpinned by maintained market share and Targa's relationship with Permian-growth leader Exxon. Gabelman also sees Targa's free cash flow yield improving to greater than 10% in 2028 from 6% in 2026, versus peer FCF yield of 8.5% in 2030, supported by EBITDA growth from new processing plants and completion of the large Speedway NGL pipeline capital project, which he said could push the market toward a 2030 valuation methodology rather than 2027 EBITDA.
Targa Resources IncTD Cowen upgraded Targa Resources to Buy and raised its price target to $350 from $275 on expected Permian wet gas growth and peer-leading EBITDA growth.
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