BMO Capital Markets raised its 12-month price target on Targa Resources (NYSE:TRGP) to $241 from $205 on Thursday, while keeping an Outperform rating. The stock was trading at $224.16 at the time of the note, close to a 52-week high of $232.86 and up roughly 39% over the past six months.
The upgrade reflects BMO apital nalyst Ameet Thakkar iting Targa s well positioned in the Permian Basin following the company's fourth-quarter earnings call. Management continues to expect high single-digit to low double-digit volumetric growth in 2026 and beyond despite a materially lower Permian rig count compared with the prior year.
Targa's fiscal 2026 EBITDA guidance was described as solid and slightly ahead of consensus, supporting the firm's more bullish target. The company has also sanctioned two projects intended to expand processing and fractionation capacity: the Yetti II gas processing plant and a 13th fractionation train at Mt. Belvieu. In addition, Targa increased its base plan for processing-plant additions to three per year, up from a prior plan of two per year.
According to available analyst notes, two analysts have raised earnings estimates for the upcoming period. The stock trades at a PEG ratio of 0.52, a metric noted as indicating an attractive valuation relative to expected growth.
Thakkar highlighted Targa's competitive position when discussing fourth-quarter results, stating: "TRGP's advantaged position in the Permian was on display again during its 4Q earnings call." He added: "We remain constructive and maintain our Outperform rating; raising our target to $241."
Despite the supportive outlook and valuation notes, Targa's reported fourth-quarter 2025 results were mixed. The company posted diluted earnings per share of $2.29, slightly under the analyst consensus of $2.32. Revenue for the quarter came in at $4.06 billion, narrowly missing the expected $4.07 billion. Even with those small misses, investor reaction was positive in premarket trading.
These developments tie together operational expansion plans, near-term financial performance, and market valuation. The sanctioned projects and elevated base plan for plant additions underpin management's volume-growth targets, while the slightly better-than-consensus fiscal 2026 EBITDA guidance provides further support for BMO's revised target. At the same time, the modest shortfalls in quarterly EPS and revenue demonstrate that reported results did not fully match analyst expectations for the period.
Bottom line: BMO's higher target and continued Outperform rating rest on Targa's Permian advantages, sanctioned capacity projects and a lifted base-build plan, set against a backdrop of mixed quarterly results and modest analyst estimate revisions.