Targa Resources Corp. Stock Price: Quote, Forecast, Splits & News (TRGP)

Perplexity Finance

TRGP

Targa Resources Corp.

TRGP

Overview

Financials

Historical Data

$169.14

-$0.64

0.38%

At close: Jun 12, 4:00:02 PM EDT

$169.00

-$0.14

0.08%

After hours: 7:59:34 PM EDT

Change

-$0.64

0.38%

Financial Profile

Prev Close

$169.78

Market Cap

$36.69B

Day Range

$167.84 - $170.19

Open

$168.00

P/E Ratio

31.1

52W Range

$118.93 - $218.51

24H Volume

$246.55M

Dividend Yield

1.92%

EPS

5.44

Key Issues

Recent Transcripts

Record Q1 adjusted EBITDA up 22%, strong Permian growth, resilient outlook, increased shareholder returns.

$215M buybacks, +33% dividend

Targa delivered record 2024 results with 17% EBITDA growth and strong Permian volume outperformance.

Financial information provided by Financial Modeling Prep. Options data provided by Unusual Whales. Live transcripts provided by Quartr. Reported revenue and EPS data from Earnings powered by FinChat.io. All data is provided for informational purposes only, and is not intended for trading purposes or financial, investment, tax, legal, accounting or other advice.

Market Cap: $37B
IPO Date: 12/7/10
CEO: Mr. Matthew J. Meloy
Fulltime Employees: 3.4K
Sector: Energy
Industry: Oil & Gas Midstream
Country: US
Exchange: New York Stock Exchange

Peers

$0.00

Watchlist

$0.00

Targa Resources Corp. Stock Price: Quote, Forecast, Splits & News (TRGP)

Perplexity Finance

TRGP

Targa Resources Corp.

TRGP

Overview

Financials

Historical Data

$169.14

-$0.64

0.38%

At close: Jun 12, 4:00:02 PM EDT

$169.00

-$0.14

0.08%

After hours: 7:59:34 PM EDT

Change

-$0.64

0.38%

Financial Profile

Prev Close

$169.78

Market Cap

$36.69B

Day Range

$167.84 - $170.19

Open

$168.00

P/E Ratio

31.1

52W Range

$118.93 - $218.51

24H Volume

$246.55M

Dividend Yield

1.92%

EPS

5.44

Key Issues

Earnings

Report Date

May 1, 2025

Reported Revenue

4.6B

Miss -6.88%

Avg 1d Change

3.28%

Report Period

Q1 2025

Reported EPS

0.91

Miss -54.04%

Implied Move 1d

7.01%

Transcript

10m 7s

Actual results could differ materially from those projected in forward looking statements. For a discussion of factors that could cause actual results to differ, please refer to our latest SEC speakers for the call today will be Matt Molloy, Chief Executive Officer Jen Neal, President and Will Byers, Chief Financial Officer. Additionally, members of Targa senior management will be available for Q and A including Pat McDonnie, President, Gathering and Processing Scott Pryor, President Logistics and Transportation and Bobby Mararo, Chief Commercial Officer. Now turn the call over to Matt. Thanks, Tristan, and good morning, everyone. We have spent the last many years positioning Targa to be successful in across changing environments, and to be a beneficiary of market volatility and are proud of our execution across the first four months of the year. We reported quarter record quarterly adjusted EBITDA despite our volumes being impacted by several winter weather events And as we look across the balance of 2025, we feel very good about our outlook. Stepped into global market volatility to opportunistically repurchase nearly $215,000,000 worth of common shares so far this year. We have and will continue to manage the evolving global tariff impacts and have done an excellent job of purchasing steel in advance to limit our potential exposure on capital projects underway.

11m 31s

Just as Targa spent the last many years strengthening our positioning the rest of the energy value chain has done the same. Meaning the industry, we believe, is largely well positioned to manage through any environment with much stronger balance sheets and financial flexibility. We have seen the forward crude price curve shift lower and our customers are not indicating material changes their drilling programs for 2025 and 2026 which means we continue to expect meaningful volume growth going forward. In lower commodity price environments, producers typically focus on drilling their highest returning wells which if you take 2020 as an example, meant rigs left the Permian Basin last, and ultimately helped drive record volumes for Targa as we grew volumes in the Permian despite significant impacts from COVID. Since 2020, we have built an excellent foot footprint across the Delaware Basin to complement our Midland Basin footprint and believe that our best in class producer customers have the most resilient underlying drilling inventory. Our core value proposition of increasing adjusted EBITDA and increasing common dividend per share and declining share count is unchanged. We believe that our integrated asset footprint largest position in the Permian and strong financial position more than 90% fee based, investment grade rating and leverage ratio at the midpoint of our long term target range.

12m 57s

Will allow us to continue to generate attractive returns and return an increasing amount of capital to our shareholders. Before I turn the call over to Jen to discuss operations in more detail, I would like to thank the Targa team for their continued focus on safety and execution, even while navigating some difficult winter weather in the first quarter. We continuing to provide best in class service and reliability to our customers.

13m 23s

Thanks, Matt. Good morning, everyone. Let's talk about our operational results in more detail. Starting in the Permian, our natural gas inlet volumes averaged over 6,000,000,000 cubic feet per day during the first quarter, an 11% increase from a year ago. Our Permian volumes were down about 1% from last quarter as we were impacted impacted by several winter weather events. As expected, Permian volumes have rebounded meaningfully and are trending approximately 200,000,000 cubic feet per day higher than the first quarter. We are also forecasting a lot of well completions for the balance of this quarter and beyond, which supports our expectation of significantly higher back half volume. Permian Midland, our Pembroke II plant is now expected to come online in the third quarter of twenty twenty five. Our East Pembroke and East Driver plants remain on track to begin operations in the second quarter and third quarter of twenty twenty six. In Permian Delaware, our Bull Moose two Falcon II plants remain on track to begin operations in the first quarter and second quarter of twenty twenty six, supporting both continued underlying organic growth and the new commercial opportunities that we executed in late twenty twenty four. We continue to invest in our Permian intra basin and long haul residue gas takeaway and FID of the recently announced Traverse Pipeline project will continue to provide flow assurance and access to important markets for our customers.

14m 47s

Shifting to our Logistics and Transportation segment, Targa's NGL pipeline transportation volumes averaged 844,000 barrels per day fractionation volumes averaged 980,000 barrels per day during the first quarter impacted by winter weather events that reduced volumes from our G and P assets. We also had a planned turnaround at Trains one through three at our CBF Fraction Fractionation Complex In Mont Belvieu across much of the first quarter and into April. Similar to what we are seeing in GMP, NGL volumes across both transportation fractionation have rebounded. Given the anticipated growth in our Permian G and P business, and corresponding announced plan additions, outlook for NGL supply growth remains strong. Our Delaware Express NGL transportation pipeline remains on track for completion in the third quarter of twenty twenty six. Our GCF fractionator was reactivated in the first quarter and our next fractionators in Mont Belvieu Trains eleven and twelve, remain on track for the third quarter of twenty twenty and the first quarter of twenty twenty seven. Turning to our LPG export business at Galena Park, our loadings averaged 13,400,000 barrels per month during the first quarter. While we had a few days of fog in the first quarter, our docks were effectively full we are seeing continued strength in cargo loadings.

16m 8s

The demand for LPGs globally remains strong, and we are well positioned with long term contracts in place. American supply is cost advantaged, and we believe the growth in U. S. Supply will continue to be important to serve global demand. Our LPG export debottleneck expansion is expected to be in service in the fourth quarter, and we remain on track with our larger LPG export expansion. Which will increase our loading capacity to 19,000,000 barrels per month to be online in the third quarter of twenty twenty seven. To build on Matt's earlier comments on our navigation of an evolving market of global tariffs, we see a low single digit percentage potential impact to project to budgeted project costs across our announced projects underway.

16m 51s

We which would fit well within our contingency for our projects. We are also doing a great job of managing our operating costs and procurement of materials that support our day to day operations. We are well positioned operationally. Believe that our wellhead to water strategy driven by activity in the Permian Basin will continue to put us in excellent position to execute for our shareholders. Will now turn the call over to Will to discuss our first quarter results outlook and capital allocation. Will? Thanks, Jen.

17m 23s

Targa's reported adjusted EBITDA for the first quarter was $1,179,000,000 a 22% increase from a year ago. The increase was attributable primarily to higher Permian volumes which drove higher volumes and margin across our integrated NGL system into 100% ownership of our Badlands assets. Our adjusted EBITDA increased 5% sequentially and was driven by the Badlands transaction and higher marketing margin. As Matt mentioned, we continue to estimate full year 2025 adjusted EBITDA to be in a range of 4,650,000,000.00 to $4,850,000,000 In February, we successfully completed a $2,000,000,000 offering comprised of 5.55% notes due 02/1935 and six point one two five percent notes due 02/1955.

18m 18s

We use the net proceeds from the debt issuance to fund the repurchase of all of the outstanding preferred equity in Targa Badlands LLC and for general corporate purposes, including to repay borrowings under our commercial paper program. At the end of the first quarter, we had $2,700,000,000 of available liquidity and our pro form a consolidated leverage ratio was approximately 3.6 times. Well within our long term leverage ratio target range of three to four times. We continue to expect net growth capital spending for 2025 in a range of 2,600,000,000.0 to $2,800,000,000 and continue to estimate 2025 net maintenance capital spending of $250,000,000 Shifting to capital allocation. Our focus is more of the same from Targa. Maintain our strong investment grade balance sheet continue to invest in high returning integrated projects, and return an increasing amount of capital to our shareholders. We continue to deliver on our share repurchase program We opportunistically repurchased $125,000,000 in common shares at an average price of $191.86 per share during the first quarter and subsequently to quarter end, we repurchased an incremental 89,000,000 at an average price of $167.28 per share. We also declared a 33% increase to our common dividend the first quarter of twenty twenty five relative to 2024.

19m 51s

We are in excellent financial position with a strong and flexible balance sheet, We'll continue to try to identify the different levers that we can use to best position Targa to create value for our shareholders. And with that, I will turn the call back over to Tristan.

20m 7s

Thanks Will. For the Q and A session, we ask that you limit to one question and one follow-up. And reenter the queue if you have additional questions. Michelle?

20m 16s

Thank you. One moment for our first question. First question comes from the line of Jeremy Tonet with JPMorgan. Your line is open. Please go ahead.

20m 37s

Hi, good morning. Hey. Good morning, Jamie. Good morning, Jamie. Hi. With oil price volatility, there's lot of concern in the market with regards to producer activity.

20m 47s

And you touched on this during your call, comments, but I was wondering if you could expand a bit more just with regards to how Targa differs from others as far as your customers, who you're levered to versus maybe others. Your position in the Permian relative to others. Maybe just you could dive in a little bit more and how you see that could differentiate Targa in the current environment.

21m 11s

Sure, Jeremy, this is Jen. Think, you know, when we think about 2025, we feel really good about where we are. At this point in the year with one quarter under our belt volumes are trending right now in April, the expected activity going forward with additional well completions expected and really where we expect to then exit 2025. We're of course in the midst of a lot of conversations with our producers as we consistently are. What we're hearing so far is really that we've got producers with multi year drilling programs in place and we expect there to be significant resiliency. I think that our differentiating factors are several. We've got the best G and P footprint across the Midland Basin and the Delaware Basin, and that's supported by what we believe to be the best rock across both of those areas, the best producers that are very well capitalized, very strong, excellent balance sheets, and really a view that they are going to drill through cycle with that multiyear drilling program approach in place. And so I think we feel really very differentiated, and that's part of what's driven our outperformance. If you go back and you look at 2020, I think that's really where you saw the differentiation of our Midland Basin footprint where despite the impacts of COVID, we grew volumes.

22m 29s

Since then, we've now acquired what we believe to be the best in class Delaware footprint. So we've really got the basin, I think, covered. And hopefully, we'll continue to provide excellent customer service to our producers that will put us in really good stead going forward.

22m 45s

Got it. That's helpful. Thank you for that. And then, as it relates to CapEx, was wondering if you might be able to elaborate a bit more the direction of CapEx 26 relative to 25 And just wondering on the potential interplay with with buybacks and just how that all mixes together given the share price volatility?

23m 6s

This is Jen, Jeremy. I think that from our perspective, a strong and flexible balance sheet is paramount to everything that we do. It allows us to continue to invest in the business and then it allows us to pull different levers as opportunities present themselves And you could see from our perspective that first quarter and in particular April presented some of those opportunities given we were blacked out for April shows that we are pretty active there in the first half of the month. I think as we look forward into 2026, we've got a number of growth capital projects underway that we believe will be much needed. Part of our 2026 spending on projects, particularly on the GMP side, is for new processing plants that are supporting not only our organic base, also the contracts that we entered into in the fourth quarter of twenty twenty four. And we think that those are going to be well positioned projects that will be well utilized. Ultimately, what will change the cadence of growth capital spend in 2026 and beyond is activity levels. And I think that we've put out a pretty good blueprint both through our track record in 2020 and 2021 when we rationalize spending quite significantly.

24m 16s

And then also, with the more illustrative or hypothetical framework that we publish last February. And really, it's that activity levels around the needs for gathering and compression that could drive spending lower or higher depending where activity levels end up. And then, of course, we'll have to think about the cadence of next project adds. But with the projects that we're adding across gathering and processing, Delaware Express on the NGL transportation side, our next two fracs, and then our LPG export debottle eight debottlenecking later this year and then next major expansion, we're going to be sitting in a really good spot from an operating leverage position across the footprint as well.

24m 58s

Got it. That's very helpful. I'll leave it there. Thanks.

25m 1s

All right. Thanks, Jeremy.

25m 3s

Thank you. One moment for our next question. Our next question comes from the line of Sapir O'Donnell with Citi. Your line is open. Please go ahead.

25m 12s

Thank you, operator. Good morning, team. Matt, wanted to go back to your comments about being able to benefit from volatility clearly sort of proven that in the past. I think last call you even noted about $100,000,000 of optimization in the year that you didn't really count on. And so I guess you'd have to argue this year, even more opportunities for that just given the volatility. Curious if you start to see that manifest itself anywhere and if that's something that probably could offset some of the commodity impact Yes, sure. No, good question. We are seeing with our growing footprint really on the gas marketing side and NGL marketing side, Just as we're moving more and more volumes through our processing plants and into Bellevue and to markets, we're just seeing more opportunities to monetize some of our positions. So last year was a good year for us, would say this first quarter. It was a good quarter for us. We kind of beat our expectations in terms of our marketing. We benefited more on the gas marketing side, but also saw strong NGL marketing as well. But it wasn't to the magnitude, I'd say, we saw last year necessarily.

26m 18s

I think if you kind of look quarter to quarter, we were maybe up around $10,000,000 or so. First quarter to what we kind of pointed to last quarter. So it was some of the sequential beat. Just as we see more opportunities, but there's also just good underlying business fundamentals as well.

26m 37s

Got it. Good to hear. Second question, maybe just going to commodity. Maybe just remind us where you are relative to your fee floors and how you're thinking about the hedging strategy from here? Yeah, I mean, when we provided our guidance, I'd say where we sit now, Waha has been very volatile. It's been bouncing around zero, it's a little higher than that now. We are below our fee floors. Across our G and P footprint. So that's really unchanged where we were at the beginning of the year. And our hedging strategy has really not not changed too much. The length the remaining length that we do have, we hedged 90% of it through 2026. So we've really taken a lot of the commodity price delta out of our kind of out of our operating results, which is why you see even with Waha at zero or close to it, we're setting records in terms of EBITDA. You rewind five years ago, that would have had a much more punitive impact on us even with our hedging program. So we've done a good job from changing our contracts, but also hedging [indiscernible] unprotected fee for volumes as well.

27m 46s

Great color. I'll leave it there.

27m 48s

Okay. Thank you.

27m 50s

Thank you. And one moment for our next question. Our next question is going to come from the line of Michael Blum with Wells Fargo. Your line is open. Please go ahead.

28m

Thanks. Good morning, everyone.

28m 2s

So it seems like you're not you're not seeing any change in LPG export activity levels, which is pretty consistent with your your peers are saying. But I'm wondering if you're seeing any change in the destination of where those cargoes are going versus historical patterns, And do you see any scenario where LPG exports kind of don't move off the docks in The US.

28m 28s

Hey, Michael, this is Scott. I would say fair to say that we have not seen any material change in our activity level at our dock. As we've moved through not only through the first quarter, but through the second quarter. As Matt mentioned in our comments, we had a very nice first quarter only impacted a little bit by by some fog delays. So it was not quite as robust as what we saw in the fourth quarter. But again, materially speaking, we are fully contracted not only through the the second quarter, but through the balance of this year and beyond. I would say that we are hearing that some of the destinations are changing relative to folks doing cargo switching on the water, if you will. So the international market, the waterborne market is very nimble. When it starts looking at, vessels that are on the water. Some of those have been [indiscernible] moved from China over to Japan or Korea and then backfilled. From Saudi tons or from other areas. So generally speaking, I would say yes, some of the transits have changed, but the overall demand has not changed into those specific regions. Predominantly to the Far East.

29m 34s

We are hopeful, much like what we saw with ethane that ethane was excluded from the tariffs for imports into China. We know that there are a variety of discussions that are going on that perhaps LPG could be excluded. We don't have that today. But again, it is a very fluid marketplace that is trying to evaluate what it needs to do The market has the supply in The U. S. It is growing. Demand is growing worldwide I think the market is very, capable of figuring out how to get product to where it needs to be from a supply demand perspective. And price will adjust predominantly on the commodity base side of things and not so much on the terminal fee side.

30m 15s

Okay, great. Now that's very helpful. Then just had maybe a different way to ask a question on buybacks. Just as we go into what seems like a more volatile macro backdrop, just wanted to get your take on how you're thinking about buybacks. Would you be more cautious trying to protect the balance sheet? Or at this point, should we think of buybacks as sort of part of the ratable program of capital return? Thanks.

30m 44s

Yes. Good question. Hey, Michael. I think as we think about buybacks, we've intentionally positioned that as an opportunistic buyback program. As Will pointed out, our balance sheet is three 3.6x debt to EBITDA. We're in really good shape, see good EBITDA growth. So we're in good financial position to where we see dislocations or weakness to be able to opportunistically opportunistically repurchase. And that's what you saw us do in April. We moved in, in early April when there was dislocation, and we purchased more. I don't know what that's going to look like as we go forward, but it's really our same posture. I see us continuing to be active. Buying back our shares and just we'll see what happens in the market, see what volatility is there. But we we think buying back shares will be a portion of the way we return capital to our shareholders. Okay. Thank you.

31m 35s

Thank you. One moment for our next question. Our next question is going to come from the line of Manav Gupta with UBS. Your line is open. Please go ahead.

31m 46s

Good morning. I just wanted to go back to the decision of moving forward with the Traverse pipeline. So help us understand the demand here. And also, how do you see this partnership with MPN, Vex and Enbridge evolving over a period of time? [indiscernible] This is Bobby. Ask the second part of that question How do you see the partnership with MPLX and Enbridge developing over a period of time?

32m 12s

Got it. Well, I'm not going to comment on the partnership coming together and how they're going to work together. But at the end of the day, there's a lot of demand growth a lot of supply growth going down into South Texas, same thing into the Katy market. We were excited to see that pipeline go FID It was in the plan when Blackcomb was launched. But it was contingent around obviously enough demand going into that pipe going south. The commercialization of that pipe has gone really well. We're really excited about it going. With Blackcomb landing down in Agua Dulce and the amount of supply going down there is the LNG demand is coming online over time. We are excited to see those two markets demand centers and supply centers getting connected with the big inch pipe. I think it'll be good for Targa, it'll be good for the producers, it'll be good for the markets coming down there.

33m 3s

Perfect. My quick follow-up here is with the macro uncertainty, the valuations have come in. If Targa the right opportunity, would you be open to small scale bolt on deals? Mean, you have a very attractive line of organic growth projects but would you be open to small bolt on deals if they meet your threshold return? Criteria.

33m 22s

Yes, sure. Yes. On the M and A question, I think our posture really remains unchanged to what it has been. We have a really good footprint and a lot of really attractive organic growth opportunities, which is going to be our primary focus. If there are opportunities to supplement our organic growth with bolt ons, I think we'll continue to look at that. Just as we have over the last several years. I would say the bar remains high. We have a lot of good opportunities and growth opportunities in front of us. But yes, we'll continue to look for bolt ons if there's something that makes sense. Then we'll evaluate those.

33m 56s

Thank you so much.

33m 58s

Okay.

33m 59s

Thank you.

33m 59s

Thank you. One moment for our next question. Our next question comes from the line of Keith Stanley with Wolfe Research. Your line is open. Please go ahead.

34m 9s

Hi, good morning. So last quarter, you you said you thought Permian volume growth on your system would likely be even stronger in 2026 than 2025. And obviously, the macro has changed since then. What I'm curious about is you've pointed to a lot of commercial agreements and new plants starting up with commitments next year. Should we think of that as potentially providing some protection if the macro stays weak and helps to lock in some growth next year? [indiscernible] Keith, this is Jen. I think that what you're hearing from us is that far this year is largely shaping up with expectations and we're excited about the growth that we expect this year. I think when we think about 2026, what we're hearing from our major producer customers so far that drilling programs are unchanged. Now clearly, there's going to be a lot of conversations between now and the end of year and into Q1 of twenty twenty six. [indiscernible] But I think what we're saying is that we're really well positioned because we're going to have a lot of growth this year and that's going to result in us exiting 2025 at, hopefully, a pretty attractive cadence of growth that will help support support into 2026.

35m 24s

And then when we're talking about those commercial agreements that we signed in the fourth quarter of twenty twenty four, the point we're really trying to make is that those are really additive to the base growth that we were otherwise expecting for 2026. And part of 2025. So I think, those help further support growth that we otherwise wouldn't have had if we hadn't entered into those agreements.

35m 46s

Great, thanks. And second one, just the Q1 results were they're pretty solid given the volumes were down and down meaningfully in the case of of fracs. So it implies a pretty good pickup in unit margins across the board. Any color you can give on that? And if you're expecting continued stronger margins throughout the year?

36m 9s

Hey Keith, this is Will.

36m 12s

Were several factors that drove the stronger results But if you're looking on the G and P side, it was a little bit of contract mix and customer activity. Different people were off for different periods of time, and we had some higher margin contracts, delivered better margin. As primary contributors.

36m 33s

Okay. Thank you.

36m 35s

Okay. Thanks, Keith.

36m 36s

Thank you. One moment for our next question. Our next question comes from the line of Theresa Chen with Barclays. Your line is open. Please go ahead.

36m 46s

Morning. There seems to be a in the commentary from producers in terms of certain ones being more willing to be responsive to the uncertainty in the macro. I'm totally hear you Jen on no material changes thus far. Just curious on your asset. I'm sorry, customer composition at this point. What percent is public versus private majors or large independents versus smaller players and then color around their place.

37m 15s

Morning, Teresa. I don't think we're gonna get into the nitty gritty specifics of how we want to break down our producer customers. But I will say that certainly from our perspective, we're working with the biggest, the best, the most highly capitalized or most well capitalized producers across the Permian. And that's part of what gives us a lot of confidence as we look forward as they continue to execute on their on their sort of multiyear drilling programs. I think that is something that as a result of consolidation across the Permian over the last many years, you've really seen the major become more meaningful players across the basin. And that where we've got a lot of exposure along with the large independents. And so that's part of what's giving us, I think, least a lot of comfort right now, that when we think about the next several years, we're sitting in a really good spot. But it really starts with the rock that our producers are sitting on and the inventory that our producers have. And ultimately, that's what we think is going to put all of us in a good position going forward. But certainly for us, we believe that we are working with high class producers, really strong positions that they're sitting on across the basin, both Midland side and Delaware side.

38m 28s

And I think that's part of what differentiates Targa relative to some others.

38m 35s

Fair enough. And on the LPG export side of things, there's not a carve out. [indiscernible] ongoing trade war. Can you talk about how this impacts the competitive landscape as some of your competitors have been very open about their brownfield and semi greenfield economics. And especially in light of new entrance into the part of the valley chain towards the end of the decade.

39m 3s

Hey, Theresa, this is Scott. Yes, as we talked about on our last earnings call, we talked about our brownfield project and how it will be very competitive in terms of the additions that it provides to our overall export capabilities. As that comes online in the third quarter of twenty twenty seven. When we look at the competitive landscape out there, it really, for us, it starts back to the wellhead. The wellhead obviously provides us a lot of opportunity for us to add gas processing plants, which, as we walk through the lineup that we've got, relative to the timing of plants that are coming online, the addition of our Frac Train eleven and twelve in in 2026 and 2027, respectively, All of that provides additional volume for us. So for us, it's really homegrown NGLs that are coming from the Permian Basin predominantly that are feeding into our pipeline that are feeding into our fractionation facility and then ultimately down to the down to our docks at the facility. So, yes, there is more expansions that are coming online. But again, we view it from the perspective of this is volumes that are coming off of our platform.

40m 9s

And we want to keep them on the platform to feed across our export dock.

40m 14s

Thank you.

40m 16s

Okay. Thank you.

40m 18s

Thank you. One moment as we move on to our next question. Our next question is going to come from the line of John McKay with Goldman Sachs. Your line is open. Please go ahead.

40m 29s

Hey, team. Thanks for the time. I wanted to go back on a couple of things. Just first, appreciate the comments on kind of outer year CapEx flexibility. But if go back to the numbers you framed up a year and a bit ago about being able to go down to $300,000,000 of CapEx in a kind of flatter Permian environment I guess given the bigger downstream projects you're working on right now, effectively, when would you be able to get to kind of down to 300 let's say, the macro does start to to soften. Is that on the table for '26 is that '28 just frame up that kind of downside protection for us, please.

41m 9s

Yes, sure. No, that's a as you think about our CapEx, it's really finishing up those larger downstream projects, which we see completing And so it's fractionation trains eleven and twelve and our export. And so those will be largely complete into 2026 and the early part of 2027. So if we are in an environment where again, that if natural gas volumes are flat, it means crude oil declining it was in that kind of environment, we said we think to stay flat, it would be roughly about $300,000,000 or so of capital to keep flat. So it's really after our downstream projects, our major projects are online that we would then if we're in that environment, step down to that level.

41m 57s

Got it. Thank you. And then maybe just circling back, I think it's a question Keith was asking, I'll just ask in a different way. For the the next set of plants coming online, you've seen them come online pretty full in the past. I guess is there anything you can frame up for us on how to think about these ramping as they come online? And then particularly, again, if we're in a softer macro environment, slower production growth environment, what that ramp look like? Do you get some help from I don't know, volumes currently being offloaded to a third party? Anything like that you can frame up.

42m 30s

Sure. I'll start and I've got Pat and Jen can jump in here. But what we've seen, I'll talk about Midland and the Delaware. On the Midland side, whenever we brought on plants, they've been pretty full pretty quickly. That system really communicates well and we're able to depressure the system, bring on when we bring on additional capacity and it fills up relatively quickly. And I think that will be our expectation for our next plants across the Midland. Delaware, we're working on enhancing the communication between all of our different facilities. We're laying additional lines and we're improving that. That one's probably a little bit more discrete and it will depend a bit more just on the overall production growth. We have between now and kind of through 2026 when those plants come on. So we still see those as highly utilized, much needed. But perhaps a little bit more, we call it, kind of white space on the Delaware side of things compared to the Midland. And it, of course, will depend on what our producers say they want to do. And into 2026 drilling plans and into 2020 Thank you.

43m 36s

Okay. Thank you.

43m 37s

Thank you. One moment for our next question. Our next question is going to come from the line of AJ O'Donnell with TPH. Your line is open. Please go ahead.

43m 49s

Good morning, everyone.

43m 51s

Just wondering if I could start with the Pembroke two getting pulled forward.

43m 56s

I'm just wondering if that is at all kind of somewhat changed your outlook on volume expectations for the year and if it has, was that pull forward more customer driven? Or would you say it was more on your end with construction just finishing ahead of schedule?

44m 14s

Good morning AJ this is Jen. I'd say it's more the latter. I'd say that our engineers do a really good job of forecasting when they expect projects to be online. But we also have a pretty good track record of being able to move projects forward a month or even a quarter as we get closer to nearing that date when they're expected online. And so this was just frankly, we've been able to get it done a little bit more quickly than we previously forecasted.

44m 43s

Okay. And then maybe just one more question on the macro.

44m 51s

I'm trying to figure out how you guys would anticipate the Permian production trending, say, fundamentals deteriorate a little bit more and we have 50 to 55 WTI for a sustained period of time. Or maybe ask differently, you know, in a flat oil environment, what do you think Permian gas production would do on an annual basis?

45m 15s

Yeah, this is Pat. With increasing GORs, I've seen different numbers in our peers have stated different numbers. But I think there's 2% to 3% growth in gas over over a flat crude oil environment, probably pretty good baseline. And certainly, I've heard higher numbers So if you're flat on crude oil with current gas volumes, is that somewhere between $800,000,000 a day to 1.2 Bcf a day? Growth in gas That's kind of the range that I think you land in.

45m 51s

And obviously, as Jen alluded to earlier, we feel like a lot of what's drilled is going to get drilled along target acreage. So we feel like that we're going to capture a larger percentage of whatever does get drilled. And be in a good position for continued growth.

46m 12s

Great.

46m 13s

Appreciate the detail. Thank you.

46m 15s

Okay.

46m 15s

Thank you.

46m 16s

Thank you. And one moment for our next question. Our next question comes from the line of Sunu Sibal with Seaport Global. Your line is open. Please go ahead.

46m 26s

Yes. Hi. Good morning, everybody. And thanks for the color on the call. I just wanted to start off on the hedging. Position. I think you said you're hedged through 26 Have you layered on additional hedges in the recent few months?

46m 43s

Sunil, this is Jen. I'd say that we're always continuing to add hedges. I think that we took a point of view previously when we stepped it up to be more than 90% hedged or at least 90% hedged through 2026 that was partially driven by a view of natural gas prices that we had. We've been continuing to add hedges since and we'll continue to add hedges going forward. I'd say that we are very disciplined around our hedging program and are more apt to add hedges than think about reducing our hedge exposure. Then of course, we have a lot of protections in place from our fee floors as well. So when we talk about our hedging program, we're generally not talking about a whole lot margin that has exposure there, but hedges do allow us to even that piece of margin that does have that exposure.

47m 28s

Okay.

47m 29s

And then going back to the volume question a little bit.

47m 35s

I I hear that, you your producers have not changed their production plans.

47m 42s

What is your sense in terms of talking to them at what kind of crude oil prices do you think there will be a response from their side in terms of change of drilling plans?

47m 55s

I think that every producer is different Sunil. And ultimately, that's part of what are gonna be a whole lot of board discussions for each and every producer. I think that so far we've frankly seen a mixed bag. We saw one smaller producer that added a rig and we've seen one smaller producer that pushed some completions. In terms of the larger producers that would really be the needle movers on Targa systems, We're just hearing that they've got multiyear drilling programs underway and there's no changes at this point in time. I think each and every producer will evaluate their individual situation their individual acreage, their individual contracts for services and other items that really impact their economics as well and then make the best decisions for them. We're well positioned with the assets that we have in place to service all our producer customers. And we believe that our assets will be well utilized. And so I think that we're sitting in a really good spot ultimately, I think a lot is going to continue to shake out. It feels like every day we've got a little bit of a changing environment here. So who's to say where we'll end up when we finish this year.

49m

But I think that 've got really strong producers that are moving volumes onto our system They are in an excellent position from a balance sheet and that's part of what gives us a lot of confidence going forward in some level of continued activity.

49m 15s

Okay. Thanks for that.

49m 18s

Thank you. Thank you.

49m 20s

You. And I would now like to hand the conference back over to Tristan Richardson for further remarks.

49m 26s

Thanks, Michelle, and thanks to everyone for joining the call this morning. We appreciate your interest in Targa Resources.

49m 34s

This concludes today's conference call. Thank you for participating. You may now disconnect. Everyone, have a great day.

Key Insights

Targa reported record Q1 adjusted EBITDA of $1.179 billion, a 22% increase year-over-year, driven by higher Permian volumes and the Badlands transaction; full-year 2025 adjusted EBITDA is estimated at $4.65–$4.85 billion.
Permian natural gas inlet volumes averaged over 6 Bcf/d in Q1 (up 11% YoY), with volumes rebounding after winter weather impacts; significant well completions are expected to drive higher volumes in the second half of 2025.
Multiple growth projects remain on track, including new processing plants in the Permian (Pembroke II, East Pembroke, East Driver, Bull Moose II, Falcon II), the Delaware Express NGL pipeline (Q3 2026), and LPG export expansions to increase capacity to 19 million barrels/month by Q3 2027.
Targa opportunistically repurchased $215 million in common shares so far in 2025 and declared a 33% increase in its common dividend for Q1 2025; the company maintains a strong balance sheet with a 3.6x leverage ratio and $2.7 billion in available liquidity.
Management expects continued volume and margin growth due to resilient, well-capitalized producer customers with multi-year drilling programs, robust hedging (90% through 2026), and a focus on high-return organic projects, while remaining open to bolt-on M&A if opportunities arise.

Recent Transcripts

Record Q1 adjusted EBITDA up 22%, strong Permian growth, resilient outlook, increased shareholder returns.

$215M buybacks, +33% dividend

Targa delivered record 2024 results with 17% EBITDA growth and strong Permian volume outperformance.

Market Cap: $37B
IPO Date: 12/7/10
CEO: Mr. Matthew J. Meloy
Fulltime Employees: 3.4K
Sector: Energy
Industry: Oil & Gas Midstream
Country: US
Exchange: New York Stock Exchange

Peers

$0.00

Watchlist

$0.00

Earnings

Report Date

May 1, 2025

Reported Revenue

4.6B

Miss -6.88%

Avg 1d Change

3.28%

Report Period

Q1 2025

Reported EPS

0.91

Miss -54.04%

Implied Move 1d

7.01%

Transcript

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16m 8s

16m 51s

17m 23s

18m 18s

19m 51s

20m 7s

Thanks Will. For the Q and A session, we ask that you limit to one question and one follow-up. And reenter the queue if you have additional questions. Michelle?

20m 16s

Thank you. One moment for our first question. First question comes from the line of Jeremy Tonet with JPMorgan. Your line is open. Please go ahead.

20m 37s

Hi, good morning. Hey. Good morning, Jamie. Good morning, Jamie. Hi. With oil price volatility, there's lot of concern in the market with regards to producer activity.

20m 47s

21m 11s

22m 29s

22m 45s

23m 6s

24m 16s

24m 58s

Got it. That's very helpful. I'll leave it there. Thanks.

25m 1s

All right. Thanks, Jeremy.

25m 3s

Thank you. One moment for our next question. Our next question comes from the line of Sapir O'Donnell with Citi. Your line is open. Please go ahead.

25m 12s

26m 18s

26m 37s

27m 46s

Great color. I'll leave it there.

27m 48s

Okay. Thank you.

27m 50s

Thank you. And one moment for our next question. Our next question is going to come from the line of Michael Blum with Wells Fargo. Your line is open. Please go ahead.

28m

Thanks. Good morning, everyone.

28m 2s

28m 28s

29m 34s

30m 15s

30m 44s

31m 35s

Thank you. One moment for our next question. Our next question is going to come from the line of Manav Gupta with UBS. Your line is open. Please go ahead.

31m 46s

32m 12s

33m 3s

33m 22s

33m 56s

Thank you so much.

33m 58s

Okay.

33m 59s

Thank you.

33m 59s

Thank you. One moment for our next question. Our next question comes from the line of Keith Stanley with Wolfe Research. Your line is open. Please go ahead.

34m 9s

35m 24s

35m 46s

36m 9s

Hey Keith, this is Will.

36m 12s

36m 33s

Okay. Thank you.

36m 35s

Okay. Thanks, Keith.

36m 36s

Thank you. One moment for our next question. Our next question comes from the line of Theresa Chen with Barclays. Your line is open. Please go ahead.

36m 46s

37m 15s

38m 28s

And I think that's part of what differentiates Targa relative to some others.

38m 35s

39m 3s

40m 9s

And we want to keep them on the platform to feed across our export dock.

40m 14s

Thank you.

40m 16s

Okay. Thank you.

40m 18s

Thank you. One moment as we move on to our next question. Our next question is going to come from the line of John McKay with Goldman Sachs. Your line is open. Please go ahead.

40m 29s

41m 9s

41m 57s

42m 30s

43m 36s

Okay. Thank you.

43m 37s

Thank you. One moment for our next question. Our next question is going to come from the line of AJ O'Donnell with TPH. Your line is open. Please go ahead.

43m 49s

Good morning, everyone.

43m 51s

Just wondering if I could start with the Pembroke two getting pulled forward.

43m 56s

44m 14s

44m 43s

Okay. And then maybe just one more question on the macro.

44m 51s

45m 15s

45m 51s

46m 12s

Great.

46m 13s

Appreciate the detail. Thank you.

46m 15s

Okay.

46m 15s

Thank you.

46m 16s

Thank you. And one moment for our next question. Our next question comes from the line of Sunu Sibal with Seaport Global. Your line is open. Please go ahead.

46m 26s

46m 43s

47m 28s

Okay.

47m 29s

And then going back to the volume question a little bit.

47m 35s

I I hear that, you your producers have not changed their production plans.

47m 42s

What is your sense in terms of talking to them at what kind of crude oil prices do you think there will be a response from their side in terms of change of drilling plans?

47m 55s

49m

49m 15s

Okay. Thanks for that.

49m 18s

Thank you. Thank you.

49m 20s

You. And I would now like to hand the conference back over to Tristan Richardson for further remarks.

49m 26s

Thanks, Michelle, and thanks to everyone for joining the call this morning. We appreciate your interest in Targa Resources.

49m 34s

This concludes today's conference call. Thank you for participating. You may now disconnect. Everyone, have a great day.

Key Insights

Targa reported record Q1 adjusted EBITDA of $1.179 billion, a 22% increase year-over-year, driven by higher Permian volumes and the Badlands transaction; full-year 2025 adjusted EBITDA is estimated at $4.65–$4.85 billion.
Permian natural gas inlet volumes averaged over 6 Bcf/d in Q1 (up 11% YoY), with volumes rebounding after winter weather impacts; significant well completions are expected to drive higher volumes in the second half of 2025.
Multiple growth projects remain on track, including new processing plants in the Permian (Pembroke II, East Pembroke, East Driver, Bull Moose II, Falcon II), the Delaware Express NGL pipeline (Q3 2026), and LPG export expansions to increase capacity to 19 million barrels/month by Q3 2027.
Targa opportunistically repurchased $215 million in common shares so far in 2025 and declared a 33% increase in its common dividend for Q1 2025; the company maintains a strong balance sheet with a 3.6x leverage ratio and $2.7 billion in available liquidity.
Management expects continued volume and margin growth due to resilient, well-capitalized producer customers with multi-year drilling programs, robust hedging (90% through 2026), and a focus on high-return organic projects, while remaining open to bolt-on M&A if opportunities arise.