Wells Fargo Upgrades Targa Resources (TRGP) & Targa Resources Partners (NGLS) to Outperform

Wells Fargo upgraded Targa Resources (NYSE: TRGP) from Market Perform to Outperform with a price target of $125-$130. Targa Resources Partners (NYSE: NGLS) was upgraded to Outperform with a price target of $62-$65.

Analyst Michael Blum said, "We’re upgrading the Targa complex (NGLS and TRGP) to Outperform from Market Perform, and raising our valuation ranges to $62-65/unit and $125-130/share, respectively (from $55-58/unit and $102-108/share), as we think the companies are among the best positioned to benefit from the growing LPG export trade. Strong Q1 results were driven by a combination of strong Field G&P margins, growing Badlands volumes, and ramping LPG export volumes. NGLS increased its distribution 9.3% year/year (in line), and reiterated 2014 EBITDA guidance of $820-880MM (or 30 40% higher than 2013), which could prove conservative, in our view."

"In addition, the partnership maintained its 2014 distribution growth target of 7-9%, but noted that it’s on track to be towards the high end of guidance. For NGLS, we are increasing our 2014 and 2015 DCF/unit estimates to $4.56 and $5.04, respectively from $4.19 and $4.71. For TRGP, we are adjusting our 2014 and 2015 DCF/share estimates to $3.06 and $3.75, respectively, from $3.11 and $3.65," he added.

For an analyst ratings summary and ratings history on Targa Resources click here. For more ratings news on Targa Resources click here.

Shares of Targa Resources closed at $106.40 yesterday.

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