Houston, Texas – Targa Resources, a midstream company focused on natural gas and natural gas liquids in the Permian Basin, is positioning itself for significant growth in the coming years. With a strategy encompassing the entire value chain from the wellhead to international markets, Targa Resources is investing heavily in expanding its processing and fractionation capabilities.

Over the past two years, Targa Resources has allocated substantial capital to enhance its infrastructure, with plans for new processing plants, fractionators, and pipelines to support its growth until 2026. Drawing comparisons to industry giant Enterprise Products, Targa Resources’ smaller size is expected to drive a faster growth rate, making it an attractive option for investors seeking capital appreciation.

Investors interested in Targa Resources should note that the company prioritizes share price appreciation over income, offering a modest yield of 2.3% and utilizing excess cash flow for share buybacks. Projections suggest a potential 35% increase in share price by 2026, with a target price of $180 per share.

With a significant portion of its natural gas and NGL volumes coming from the Permian Basin, Targa Resources operates a full value chain from gathering and processing to fractionation and export terminals. The company’s growth trajectory includes completing several M&A transactions and expanding its processing plants and fractionators, with investments expected to peak at $2.7 billion by 2024 before scaling back to $1.7 billion annually.

Looking ahead, Targa Resources anticipates bringing online new processing plants, fractionators, pipelines, and expanding its export terminal capacity in the next few years, projecting substantial EBITDA growth by the end of 2026. This growth potential is underlined by investments that could increase EBITDA to $5.1 billion, representing a 25% growth rate and a 13% compound annual growth rate.

Investors should consider Targa Resources’ valuation, which currently trades at a slightly higher EV to EBITDA multiple than comparable companies like Enterprise Products. However, the company’s projected EBITDA growth rate suggests potential for significant share price appreciation, outperforming its competitors in the long run.

As Targa Resources continues its growth trajectory, investors should be aware of potential risks, such as regulatory challenges or cost overruns in capital projects, which could impact returns. Nevertheless, the company’s strategic investments and focus on debt stabilization indicate a path towards sustained growth and shareholder returns in the future.

In conclusion, Targa Resources presents a compelling opportunity for investors seeking capital appreciation, with a strong growth trajectory and strategic investments positioning the company for significant future growth. With a focus on expanding its infrastructure and maximizing operational efficiency, Targa Resources is poised to deliver value to its shareholders in the years to come.