Stifel has lifted its price target for Targa Resources (NYSE:TRGP) to $243 from $213 and left its Buy rating intact, the firm said on Thursday. The revision follows results for the fourth quarter of 2025 that, according to Stifel, came in ahead of the firm’s expectations.
Targa’s stock has been on an upward trajectory, climbing 39% over the last six months and trading at $228.33, close to its 52-week high of $232.86. The firm continues to point to growth in the Permian Basin for 2026, differentiating Targa’s outlook from other midstream peers that have taken a more cautious stance.
Targa services some of the region’s largest producers, which Stifel says operate with attractive economics that are supporting higher volumes on Targa’s system. Management has been expanding the company’s footprint through acquisitions and remains confident in multi-year EBITDA growth.
Capital expenditure expectations are set to decline as several of Targa’s largest projects are scheduled to enter service in late 2027. Stifel noted that lower near-term capital spending would create flexibility for the company to return cash to shareholders, either through larger dividends, share buybacks, or a combination of both. InvestingPro Tips records that the company has raised its dividend for four consecutive years and currently yields 1.78%. At the same time, InvestingPro analysis flags that the shares may be overvalued at current levels.
Stifel summed up its view by saying the company is executing across its operations. That said, Targa’s own fourth-quarter 2025 results presented a mixed picture: the company reported earnings per share of $2.29, short of the $2.32 analysts had expected, and revenue of $4.06 billion, just under the $4.07 billion forecast. Market reaction to the quarterly figures appeared constructive, with the stock ticking higher in premarket trading.
Adding to the suite of analyst support, BMO Capital also raised its price target for Targa Resources, moving it from $205 to $241 while maintaining an Outperform rating. BMO emphasized Targa’s strong positioning in the Permian Basin as a central rationale for its revised outlook.
Management guidance included a projection of high single-digit to low double-digit volumetric growth in 2026 and beyond, a pace the company expects to sustain even with a lower Permian rig count. Those growth assumptions, together with the anticipated decline in capital expenditures once major projects are online, underpin the bullish stance from both Stifel and BMO.
Investors and market observers will likely weigh the incremental positives from analyst upgrades and Permian volume momentum against the modest quarterly misses and valuation concerns noted by InvestingPro. For investors focused on the midstream energy sector, Targa’s results and the analysts’ commentary highlight the tension between operational growth prospects and near-term financial metrics.
Summary
Stifel increased its price target on Targa Resources to $243, maintaining a Buy rating, citing stronger-than-expected fourth-quarter 2025 results and ongoing Permian Basin growth. Shares have risen sharply over six months and trade close to their 52-week high. BMO Capital also raised its target to $241 and kept an Outperform rating. Targa reported Q4 EPS of $2.29 and revenue of $4.06 billion, both slightly below consensus estimates. Management anticipates high single-digit to low double-digit volumetric growth in 2026 and beyond, and capex is expected to decline as major projects enter service in late 2027.
Key points
- Stifel raised its price target to $243 from $213 and kept a Buy rating after Q4 2025 results that exceeded its expectations - impacts energy and financial markets.
- BMO Capital lifted its target to $241 with an Outperform rating, pointing to Targa’s strong position in the Permian Basin - relevant to midstream and upstream oil and gas sectors.
- Targa expects significant volumetric growth in 2026 and beyond despite a lower Permian rig count; capex should fall as large projects enter service in late 2027, potentially enabling increased shareholder returns.
Risks and uncertainties
- Quarterly performance fell slightly short of expectations with EPS of $2.29 versus $2.32 and revenue of $4.06 billion versus $4.07 billion - a near-term performance risk for investor sentiment, affecting equity market reception.
- InvestingPro analysis indicates the stock may be overvalued at current levels, introducing valuation risk for equity investors in the energy sector.
- The timeline for capital expenditure reductions depends on major projects entering service in late 2027; any delays could affect cash flow and the ability to return capital to shareholders.