A Look At Targa Resources (TRGP) Valuation After Renewed Interest From Oakmark And Outperform Ratings

Recent attention on Targa Resources (TRGP) was sparked by Oakmark Select Fund’s latest investor letter and a consensus “Outperform” view from multiple brokerages, which together helped refocus the market on this midstream operator. See our latest analysis for Targa Resources. The recent 3.62% one day share price move and consensus “Outperform” calls sit against a mixed picture, with a 24.94% 90 day share price return but a 1 year total shareholder return of 9.09% decline, so momentum looks more short term than long term. If this kind of midstream interest has your attention, it could be a good moment to broaden your watchlist with fast growing stocks with high insider ownership for fresh ideas beyond energy infrastructure. So with Targa trading at $182.78, sitting at roughly a 15% gap to the average analyst target and an indicated 32% intrinsic discount, is the market offering you value here, or already baking in the next leg of growth? Most Popular Narrative: 12.7% Undervalued With Targa Resources last closing at US$182.78 against a narrative fair value of US$209.40, the widely followed view is that the current price leaves a valuation gap that rests on specific volume and margin expectations. Substantial investment in integrated export infrastructure, including the expansion and debottlenecking of LPG export facilities and new fractionation trains, directly leverages rising international and petrochemical-sector demand for U.S. NGLs. This creates long-term opportunities to enhance utilization and operating leverage, which should support higher earnings and margins. Read the complete narrative. Curious what kind of revenue climb and margin lift are baked into that US$209.40 figure, and what future earnings multiple ties it all together? The most followed narrative sets out a detailed path for top line expansion, fatter profit margins and a premium P/E years from now. The tension is how those assumptions line up with your own expectations for cash generation. Result: Fair Value of $209.40 (UNDERVALUED) Have a read of the narrative in full and understand what's behind the forecasts. However, that story could wobble if midstream overbuild squeezes NGL export margins, or if tighter regulation and environmental costs weigh on future project economics. Find out about the key risks to this Targa Resources narrative. Another View: Rich P/E Puts Pressure On The Story Our SWS DCF model sees Targa Resources as trading about 31.8% below its estimated fair value of US$268.18, which also points to undervaluation. The question is whether you are comfortable anchoring on long term cash flow assumptions that may not match how the market is currently pricing midstream risk. Look into how the SWS DCF model arrives at its fair value. TRGP Discounted Cash Flow as at Jan 2026 Build Your Own Targa Resources Narrative If you see the assumptions differently, the best move is to look through the numbers yourself and build a version that fits your view, then Do it your way A great starting point for your Targa Resources research is our analysis highlighting 3 key rewards and 3 important warning signs that could impact your investment decision. Ready to hunt for your next idea? If you stop with just one company, you risk missing out on other opportunities that might suit your style even better, so keep your research universe wide. Spot potential mispricings by scanning these 886 undervalued stocks based on cash flows that may be trading below what their cash flows imply. Tap into rapid change across technology by checking out these 25 AI penny stocks that are tied to artificial intelligence themes. Boost your income focus by reviewing these 12 dividend stocks with yields > 3% that could add yield to a diversified portfolio. This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.