| Valuation method | Value, £ | Upside, % |
|---|---|---|
| Artificial intelligence (AI) | 84.20 | -57 |
| Intrinsic value (DCF) | 74.44 | -62 |
| Graham-Dodd Method | n/a | |
| Graham Formula | 62.60 | -68 |
Targa Resources Corp. (LSE: 0LD9.L) is a leading midstream energy company specializing in the gathering, processing, and transportation of natural gas, natural gas liquids (NGLs), and crude oil across North America. Headquartered in Houston, Texas, Targa operates through two key segments: Gathering and Processing, and Logistics and Transportation. The company owns and manages an extensive infrastructure network, including 28,400 miles of natural gas pipelines, 42 processing plants, and 34 storage wells with a capacity of 76 million barrels. Targa serves a diverse clientele, from liquefied petroleum gas exporters to refineries and petrochemical companies in the Gulf Coast region. With a market capitalization of approximately $34.7 billion, Targa plays a critical role in the U.S. energy supply chain, leveraging its midstream assets to ensure efficient energy distribution. The company’s strategic focus on NGL logistics and wholesale propane services positions it as a key player in the evolving energy sector, particularly as demand for cleaner-burning fuels grows.
Targa Resources Corp. presents a compelling investment opportunity due to its strong midstream infrastructure, diversified revenue streams, and strategic positioning in the North American energy market. The company’s $16.4 billion revenue and $1.3 billion net income in the latest fiscal year underscore its operational strength. However, investors should note its high beta (1.22), indicating sensitivity to broader market and energy price volatility. Targa’s $14.3 billion total debt could pose risks if interest rates rise or energy demand weakens. On the positive side, the company generates robust operating cash flow ($3.6 billion) and offers a dividend yield supported by a $3.25 per share payout. Given its exposure to NGLs and natural gas—key components in the transition to lower-carbon energy—Targa is well-positioned for long-term growth, though cyclical energy market risks remain.
Targa Resources Corp. holds a competitive edge in the midstream energy sector due to its extensive asset footprint, particularly in the Permian Basin and Gulf Coast regions, which are critical hubs for U.S. energy production. The company’s vertically integrated operations—spanning gathering, processing, fractionation, and transportation—allow it to capture value across the energy supply chain. Targa’s focus on NGL logistics differentiates it from peers, as NGL demand remains resilient amid global energy transitions. However, competition is intense, with larger players like Enterprise Products Partners and Energy Transfer operating at greater scale. Targa’s smaller size relative to these giants may limit its bargaining power with producers, but its specialized NGL infrastructure provides a niche advantage. Additionally, the company’s leverage (debt-to-equity ratio) is higher than some peers, which could constrain financial flexibility in downturns. Strategic acquisitions, such as its recent expansion in the Permian, bolster growth prospects, but execution risks persist. Overall, Targa’s competitive positioning is strong in NGL-focused midstream services, though it faces pressure from both integrated majors and agile independents.