UBS Raises Price Target on Targa Resources (TRGP) to $58; Reiterates Buy
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UBS reiterated a Buy rating on Targa Resources (NYSE: TRGP), and raised the price target to $58.00 (from $53.00). TRGP saw a $75MM benefit YTD in 2016 from previously acquired hedges; however, in 2017 the recent hedging activity and pricing levels mutes the upside. UBS updated EBITDA estimates for 2016/2017/2018 to $1,036MM/$1,115MM/$1,287MM from $1,066MM/$1,178MM/$1,283MM.
Analyst Shneur Gershuni commented, "In 2017, we expect investors will continue to focus on the crude oil and natural gas production growth in the Permian and TRGP will be one of the top G&P beneficiaries. We see TRGP’s Permian inlet volumes increasing ~10% YOY in 2017. As expected, TRGP announced a new 200MMcf/d processing plant in the Midland basin that is expected to come online in 2017. TRGP also completed a 200MMcf/d Buffalo plant (Martin County – Midland Basin) in mid-2016. We note that rig count in the Martin County increased to 22 rigs in late November, up from 13 rigs in mid-September when we published our deep dive G&P Permian note."
Shares of Targa Resources closed at $53.29 yesterday.
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Create E-mail Alert Related CategoriesAnalyst Comments, Analyst EPS Change, Analyst PT Change
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