UPDATE: Wolfe Research Upgrades Targa Resources (TRGP) to Outperform, 'Premium story at a discount'
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Wolfe Research analyst Keith Stanley upgraded Targa Resources (NYSE: TRGP) from Peerperform to Outperform with a price target of $37.00.
The analyst comments "The company exceeded expectations through the downturn and the stock rebounded nicely. However, the stock has since cooled off and is only in line with the group YTD, creating a better entry point. The current backdrop of $60 oil is constructive for Targa’s increasingly Permian-levered NGL business. We forecast well above-average 8%/yr EBITDA growth through 2023 from operational leverage at existing assets, the roll-off of below market hedges, and further supplemented by the anticipated accretive buy-in of high-quality assets in the DevCo structure in 2022 for only 5-6x EBITDA. Near term, we think 2021 is tracking to the upper half of the guidance range given supportive NGL prices."
Shares of Targa Resources closed at $31.64 yesterday.
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