TD Cowen initiated coverage of Targa Resources with a Hold rating and $192 price target on Monday, marking a cautious stance on the midstream energy company despite its recent record-breaking financial performance. The rating from analyst Jason Gabelman comes as the Houston-based firm trades near $172 per share, suggesting modest upside potential of about 12%.
The Hold rating places TD Cowen below the broader Wall Street consensus, which remains bullish on the Permian Basin-focused company. According to Investing.com, the initiation reflects concerns about growth outlook despite the company's strong operational positioning.
Targa Resources maintains strong support from most Wall Street analysts, with 17 firms providing an average price target of $199.94 and a "Strong Buy" consensus rating1. The targets range from a low of $142 to a high of $244, according to Stock Analysis1. TipRanks notes that 18 of 19 analysts maintain Strong Buy ratings, with only one Buy recommendation2.
TD Cowen's $192 target sits below the average analyst expectation of $201.50 compiled by Nasdaq3, which represents potential upside of 18.78% from recent trading levels. The divergence highlights varying perspectives on the company's valuation amid strong operational metrics.
Targa Resources delivered record first-quarter results in 2025, reporting adjusted EBITDA of $1.179 billion—a 22% increase from the prior year1. The company's Permian Basin operations drove the growth, with inlet volumes surging 11% year-over-year to 6.0 billion cubic feet per day1.
The company increased its dividend by 33% and maintained full-year adjusted EBITDA guidance of $4.65 to $4.85 billion2. Permian Basin operations now account for 75% of Targa's total inlet volumes, positioning the company to benefit from continued shale activity in the region1.
Targa operates gathering and processing assets with substantial positions in the Permian, Stack, Scoop, and Bakken plays, along with fractionation capacity at Mont Belvieu and a liquefied petroleum gas export terminal1. The company's strategic focus on fee-based revenue helps mitigate commodity price volatility.
Recent infrastructure investments, including the Bull Moose II and Roadrunner II processing plants, support capacity expansion as producer activity increases in the Permian2. The company maintains $2.7 billion in liquidity and expects meaningful volume growth in the second half of 20252.
TD Cowen's Hold rating reflects the tension between Targa's strong operational execution and questions about whether current valuations fully reflect the company's growth trajectory.
