Targa Resources Intrinsic Value – Arizona State Retirement System Increases Position in Targa Resources Corp., Baffling Financial Experts
July 20, 2023
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On July 18, 2023, the Arizona State Retirement System made a bold move that has left financial experts perplexed – they increased their position in Targa Resources ($NYSE:TRGP) Corp. (NYSE: TRGP). Targa Resources Corp. is an energy infrastructure company that provides midstream services, including gathering, processing, storage, transportation and marketing of natural gas, natural gas liquids, crude oil, refined products and other hydrocarbon-related services. The Arizona State Retirement System’s decision to invest more in Targa Resources Corp. has come as a surprise to many due to the company’s recent stock performance. Despite this decline, the Arizona State Retirement System felt confident enough to increase their holdings in the company.
The move has puzzled many analysts as they are unsure what the Arizona State Retirement System sees in Targa Resources Corp. that would make them increase their position despite the stock price decline. Although the company’s fundamentals may be strong, many investors are uncertain of how the stock will perform in the future. Only time will tell if the Arizona State Retirement System’s investment was a wise one, but for now, it has left financial experts scratching their heads.
Share Price
The stock opened at $78.2 and closed at $78.7, up by 0.3% from its prior closing price of $78.5. This move was unexpected since the stock has been experiencing downward pressure in recent weeks. The exact amount of shares purchased by the Arizona State Retirement System is unknown, however, it is likely that it is a significant purchase. This move comes at a time when Targa Resources Corp. is in the midst of restructuring their debt and attempting to improve their financial position.
The additional funds from the Arizona State Retirement System could help the company to achieve this goal. It is unclear, however, what the long-term implications of this purchase will be for Targa Resources Corp. and its shareholders. Live Quote…
About the Company
Income Snapshot
Below shows the total revenue, net income and net margin for Targa Resources. More…
| Total Revenues | Net Income | Net Margin |
| 20.49k | 890 | 5.9% |
Cash Flow Snapshot
Below shows the cash from operations, investing and financing for Targa Resources. More…
| Operations | Investing | Financing |
| 2.8k | -4.43k | 1.71k |
Balance Sheet Snapshot
Below shows the total assets, liabilities and book value per share for Targa Resources. More…
| Total Assets | Total Liabilities | Book Value Per Share |
| 19.03k | 14.61k | 11.28 |
Key Ratios Snapshot
Some of the financial key ratios for Targa Resources are shown below. More…
| 3Y Rev Growth | 3Y Operating Profit Growth | Operating Margin |
| 34.5% | 45.3% | 12.9% |
| FCF Margin | ROE | ROA |
| 5.8% | 63.5% | 8.7% |
Analysis – Targa Resources Intrinsic Value
GoodWhale recently conducted an analysis of TARGA RESOURCES‘ wellbeing. After studying the company’s financials, analyzing its industry, and examining its current performance in the market, we calculated the fair value of TARGA RESOURCES share to be around $65.8 using our proprietary Valuation Line. As of now, TARGA RESOURCES stock is traded at $78.7, which is a fair price that is overvalued by 19.7%. More…
Peers
The company has a strong presence in the key producing basins in the United States and is well-positioned to capitalize on the growing demand for natural gas. Targa’s competitors include ONEOK Inc, Kinetik Holdings Inc, Anhui Province Natural Gas Development Co Ltd.
– ONEOK Inc ($NYSE:OKE)
ONEOK Inc is a leading midstream service provider in the United States. It has a market cap of 24.61B as of 2022 and a Return on Equity of 28.78%. The company operates in three segments: Natural Gas Gathering, Processing and Transportation; Natural Gas Liquids (NGL) Gathering, Processing, Transportation and Marketing; and Crude Oil Gathering and Transportation. ONEOK is one of the largest independent natural gas processors in the United States, with an average processing capacity of 2.6 billion cubic feet per day in 2020. The company is also one of the largest NGL marketers in the United States and owns one of the largest NGL transportation systems in the country.
– Kinetik Holdings Inc ($NASDAQ:KNTK)
Kinetik Holdings Inc is a publicly traded company with a market capitalization of $1.49 billion as of 2022. The company has a return on equity of 5.46%. Kinetik Holdings Inc is engaged in the business of providing turnkey engineering, procurement and construction services for the development and construction of electric transmission and distribution systems.
– Anhui Province Natural Gas Development Co Ltd ($SHSE:603689)
Anhui Province Natural Gas Development Co Ltd is a Chinese state-owned enterprise that engages in the development and operation of natural gas projects. The company has a market cap of 3.45 billion as of 2022 and a return on equity of 7.42%. The company’s main business activities include the exploration, development, production, and sales of natural gas.
Summary
Investing in Targa Resources Corp. (TARGA) has proven to be a wise decision for the Arizona State Retirement System, as evidenced by their recent increase in position. Analysts are impressed with TARGA’s strong financials and impressive growth over the past year. Furthermore, Targa’s balance sheet is strong and their dividend yield is nearly three and a half percent, both of which make it attractive for long-term investors. TARGA’s stock price has shown exceptional resilience, and investors may continue to see strong returns over the coming years.
