Targa Earnings: Volume Strength Goosed by Recent Deal Activity, Offset by Lower Pricing

Targa Resources' second-quarter results were solid, in our view. The firm reaffirmed 2023 EBITDA guidance at the midpoint of $3.6 billion; this is slightly below our estimate of $3.7 billion, as we think volumes are tracking to better results. We continue to expect near-term volume strength across Targa’s portfolio to offset pricing and marketing weakness in the short run. 2023 growth capital spending guidance also is unchanged at a midpoint of $2.1 billion. After updating our model, we maintain our $72 fair value estimate and no-moat rating.