Targa Resources Earns Record EPS Despite Revenue Miss
May 6, 2023
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Targa Resources ($NYSE:TRGP), a leading independent midstream energy company, recently reported a record-breaking GAAP earnings per share (EPS) despite missing revenue expectations. The company reported a GAAP EPS of $6.30, exceeding analyst expectations by a remarkable $4.91. Targa Resources is an integrated midstream energy company that provides gathering, processing, and transmission services to the oil and gas industry.
The company’s infrastructure network consists of natural gas pipelines, storage facilities, and terminals located across the United States. Targa Resources has grown to become one of the largest independent midstream energy companies in the nation, with a diverse asset portfolio and strong presence in some of the most prolific oil and gas basins in the US.
Market Price
On Thursday, TARGA RESOURCES stock opened at $71.6 and closed at $69.4, down by 2.9% from previous closing price of 71.4. Analysts believe that the company’s strong EPS performance is due to its cost-cutting measures and focus on efficient capital allocation. Despite missing its revenue target, TARGA RESOURCES’ strong EPS is a sign that the company is efficiently utilizing its resources and capital to drive profits and shareholder value. In addition, the company’s cash flows and liquidity remain strong, which means that the company is well-positioned to capitalize on future opportunities. 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 |
| 20.93k | 896.8 | 3.8% |
Cash Flow Snapshot
Below shows the cash from operations, investing and financing for Targa Resources. More…
| Operations | Investing | Financing |
| 2.38k | -4.15k | 1.83k |
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 |
| 19.56k | 14.58k | 11.79 |
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 |
| 34.1% | 58.3% | 10.1% |
| FCF Margin | ROE | ROA |
| 5.0% | 52.2% | 6.7% |
Analysis
GoodWhale has conducted an analysis of TARGA RESOURCES‘s financials, and the results indicate an intermediate health score of 6/10. This indicates that TARGA RESOURCES is able to pay off debt and fund future operations. We have classified TARGA RESOURCES as a ‘cheetah’ company, which is a type of organization that has achieved high revenue or earnings growth yet is considered less stable due to lower profitability. Investors who may be interested in this type of company could benefit from its strong dividends and growth potential, as well as its medium asset and profitability. With the right risk management strategies, TARGA RESOURCES could be a good fit for long-term investors looking for short-term returns. 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
Targa Resources reported better-than-expected earnings per share (EPS) of $6.30 for its most recent quarter, beating analysts’ estimates by $4.91.
However, revenue of $4.52 billion missed expectations by $760 million. Investors should take this earnings report into account when considering future investments in Targa Resources. The company’s performance indicates that its strategies are working to improve profitability, but there are still areas to be improved in terms of revenue growth. It will be important to keep an eye on Targa Resource’s performance to see if these changes lead to sustained success and improved stock prices in the long run.
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