Targa Resources Corp

TRGP: XNYS (USA)

Morningstar Rating for Stocks	Fair Value	Economic Moat	Capital Allocation
	$82.00	Rnsb	Mnvtqht

Targa: Fee Floors Support Substantial Fair Value Estimate Increase to $99

Stephen Ellis

Mar 1, 2024

After updating our model to reflect the existence of strong fee floors within Targa's gathering and processing business, or G&P, plus the demand-pull nature of Targa's pipes (Grand Prix and soon Daytona) serving as a ready demand source for G&P volumes, we're raising our fair value estimate to $99 from $79. Our EBITDA multiple for 2024 is about 9.2 times, in line with peers, versus a discount.

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