NYSE:TRGP
Targa Resources Corp.
A leading U.S. NGL infrastructure operator delivering value through integrated gathering, processing, and transportation networks.
Key Metrics
Investment Thesis
Bull Case
Targa offers exposure to the essential midstream infrastructure required by U.S. energy production, supported by strong operational cash flows and a diversified geographic footprint. The company's ability to generate $1.96B in net profit demonstrates resilience, while its NGL processing assets provide critical value-add capabilities that are less correlated with spot commodity prices.
Bear Case
The significant decline in revenue from 2022 to recent years raises concerns about the sustainability of growth without major new acquisitions or market expansion. High leverage and large capital expenditure requirements could strain liquidity if NGL margins compress further, potentially limiting dividends or buyback capabilities.
About Targa Resources Corp.
Targa Resources Corp. is an energy infrastructure company focused on gathering, processing, and transporting natural gas liquids (NGLs) across the United States. The company serves producers in the Permian Basin, Eagle Ford Shale, and Bakken fields, providing essential midstream services that convert raw natural gas into high-value marketable products.
Analysis
Management Discussion
Despite generating strong operating profit of $3.33B and robust cash flow from operations of $3.92B, revenue growth has stagnated at $17.03B in 2025 compared to a peak of $20.93B in 2022. The company continues to invest heavily with capital expenditures reaching $3.33B while managing significant cash outflows for investing activities of -$3.64B, suggesting ongoing expansion or asset maintenance requirements.
Industry Overview
The U.S. natural gas liquids industry is characterized by high capital intensity and a focus on processing raw gas into higher-margin products like ethane and propane. Infrastructure owners like Targa benefit from long-term contracts with producers but face competition for market access as supply capacity continues to outpace demand in certain regions.
Financial Statements
Income Statement
Balance Sheet
Cash Flow
| Metric | 2022 | 2023 | 2024 | 2025 |
|---|---|---|---|---|
| Revenue | $20.93B | $16.06B | $16.38B | $17.03B |
| Cost of Revenue | $16.88B | $10.68B | $10.70B | $10.51B |
| Gross Profit | $4.05B | $5.38B | $5.68B | $6.52B |
| Operating Expenses | $2.32B | $2.76B | $2.98B | $3.19B |
| Operating Income | $1.73B | $2.63B | $2.70B | $3.33B |
| G&A | $309.7M | $348.7M | $384.9M | $406.0M |
| Stock-Based Comp | $57.5M | $62.4M | $63.2M | $69.5M |
| D&A | $1.10B | $1.33B | $1.42B | $1.52B |
| Depreciation | $853.8M | $945.6M | $1.05B | $1.19B |
| Amortization | $242.2M | $384.0M | $373.2M | $326.0M |
| Other OpEx | $2.01B | $2.41B | $2.60B | $2.78B |
| Non-Operating Income | $-65.8M | $-683.7M | $-757.4M | $-844.8M |
| Pre-Tax Income | $1.66B | $1.94B | $1.94B | $2.49B |
| Income Tax | $131.8M | $363.2M | $384.5M | $529.7M |
| Continuing Ops | $1.53B | $1.58B | $1.55B | $1.96B |
| Discontinued Ops | $0 | $0 | $0 | $0 |
| Net Income | $1.53B | $1.58B | $1.55B | $1.96B |
| Minority Interest | $335.9M | $233.4M | $241.5M | $33.7M |
| Net to Common | $1.20B | $1.35B | $1.31B | $1.92B |
| Metric | 2022 | 2023 | 2024 | 2025 |
|---|---|---|---|---|
| Current Assets | $2.36B | $2.19B | $2.30B | $2.36B |
| Cash & Equivalents | $219.0M | $141.7M | $157.3M | $166.1M |
| Accounts Receivable | $1.41B | $1.47B | $1.62B | $1.47B |
| Inventory | $393.8M | $371.5M | $334.3M | $429.3M |
| Other Current Assets | $335.4M | $210.4M | $186.4M | $292.7M |
| Long-Term Assets | $17.20B | $18.48B | $20.44B | $22.86B |
| PP&E (Net) | $14.21B | $15.81B | $18.06B | $20.53B |
| Goodwill | $45.2M | $45.2M | $45.2M | $112.3M |
| Operating Leases | $57.3M | $101.1M | $103.7M | $93.9M |
| Other LT Assets | $2.75B | $2.38B | $2.03B | $1.81B |
| Total Assets | $19.56B | $20.67B | $22.73B | $25.22B |
| Current Liabilities | $3.07B | $2.76B | $3.17B | $3.55B |
| Accounts Payable | $1.45B | $1.57B | $2.01B | $1.87B |
| Current Leases | $14.4M | $21.8M | $25.2M | $24.3M |
| Other Current Liab | $1.33B | $882.5M | $798.9M | $1.29B |
| Long-Term Liabilities | $11.51B | $13.30B | $15.14B | $18.47B |
| LT Operating Leases | $28.6M | $56.5M | $90.4M | $89.5M |
| Other LT Liab | $11.48B | $13.24B | $15.05B | $18.27B |
| Total Liabilities | $14.58B | $16.06B | $18.32B | $22.02B |
| Shareholders' Equity | $4.98B | $4.61B | $4.42B | $3.20B |
| Paid-In Capital | $3.70B | $3.06B | $3.09B | $3.09B |
| Retained Earnings | $-626.8M | $492.0M | $1.19B | $2.29B |
| AOCI | $54.7M | $85.6M | $27.5M | $113.8M |
| Treasury Stock | $464.7M | $896.9M | $1.71B | $2.43B |
| Total L&E | $19.56B | $20.67B | $22.73B | $25.22B |
| Metric | 2022 | 2023 | 2024 | 2025 |
|---|---|---|---|---|
| Net Income (CFO) | $1.53B | $1.58B | $1.55B | $1.96B |
| Non-Cash Adjustments | $797.4M | $1.59B | $2.02B | $1.94B |
| Working Capital Changes | $52.0M | $40.2M | $81.0M | $20.6M |
| Cash from Operations | $2.38B | $3.21B | $3.65B | $3.92B |
| Capital Expenditures | $1.33B | $2.39B | $2.97B | $3.33B |
| Cash from Investing | $-4.15B | $-2.40B | $-3.02B | $-3.64B |
| Cash from Financing | $1.83B | $-888.1M | $-612.8M | $-266.6M |
| FX Effect | $0 | $0 | $0 | $0 |
| Net Change in Cash | $60.5M | $-77.3M | $15.6M | $8.8M |
| Beginning Cash | $158.5M | $219.0M | $141.7M | $157.3M |
| Ending Cash | $219.0M | $141.7M | $157.3M | $166.1M |
Frequently Asked Questions
How does Targa Resources Corp. make money?
The company operates primarily through three segments: Gathering and Compression, which collects raw gas from production fields; Processing Plants that fractionate natural gas into valuable NGLs like ethane, propane, and butane; and Transportation Pipelines that move these refined products to downstream markets.
What are the main risks for TRGP?
Investors should monitor declining or flat revenue trends as seen from 2022-2024, which may indicate market saturation or pricing pressure. High capital expenditures of $3.33B represent significant cash outflow risks if operational efficiency does not improve. Additionally, the company faces substantial debt obligations reflected in total liabilities of $22.02B against a shareholders' equity of $3.20B.
What is TRGP's competitive advantage?
Targa's extensive network of processing plants provides critical access to NGL markets for producers in the Permian Basin. The company benefits from a robust asset base with high utilization rates and long-term contracts that secure revenue visibility despite commodity price volatility.
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Not financial advice. All content is for informational purposes only. Data may contain errors. Consult a qualified financial advisor before making investment decisions.