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TRGP Q1 Earnings & Revenues Miss Estimates, Adjusted EBITDA Up Y/Y
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Key Takeaways
TRGP posted record Q1 adjusted EBITDA of $1.4B, up 19% on strong Permian and fractionation volumes.
Targa raised its dividend 25%, repurchased shares and expanded Permian processing capacity.
TRGP expects 2026 adjusted EBITDA of $5.7B-$5.9B, driven by growth and fee-based cash flows.
Targa Resources Corp. (TRGP - Free Report) reported first-quarter 2026 earnings of $2.21 per share, which missed the Zacks Consensus Estimate of $2.55. The underperformance can be attributed to severe winter weather that impacted volumes across its systems, weak Waha natural gas prices that led to producer curtailments in the Permian Basin during the quarter and higher operating expenses related to maintenance activity, system expansions and acquired Permian assets.
The bottom line, however, increased from the year-ago quarter’s level of 91 cents. The year-over-year improvement can be attributed to higher operating margins in the company’s Gathering and Processing and Logistics and Transportation segments.
Total quarterly revenues of $4.1 billion missed the Zacks Consensus Estimate of $5.1 billion by 19.64%. Revenues also declined 10% from the year-ago quarter’s level of $4.6 billion, primarily due to lower commodity sales, partly offset by higher fees from midstream services.
Targa Resources, Inc. Price, Consensus and EPS Surprise
Despite the revenue miss, Targa delivered record first-quarter adjusted EBITDA of $1.4 billion, up 19% from the prior-year quarter. The increase was driven by record Permian inlet volumes, record fractionation volumes and higher marketing margins.
Taking a Closer Look at Q1 Results
On April 16, 2026, Houston, TX-based oil and gas storage and transportation company declared a quarterly dividend of $1.25 per share, or $5 annualized, representing a 25% increase from the first-quarter 2025 dividend. The company also repurchased $55 million of common stock during the quarter.
In the first quarter, Targa benefited from continued strength across its integrated Permian-to-Mont Belvieu footprint. Management mentioned that the company still achieved record first-quarter adjusted EBITDA, Permian volumes and NGL fractionation volumes despite winter weather and periodic shut-ins. The company also mentioned that current Permian volumes were running more than 250 million cubic feet per day above the first-quarter average, even with 200-400 million cubic feet per day of temporary producer shut-ins on any given day.
TRGP’s Segmental Performance
Gathering and Processing: The segment’s operating margin was $703.5 million, up 17% from $602.2 million in the year-ago quarter. However, the figure missed the Zacks Consensus Estimate of $757 million. Adjusted operating margin increased 16% year over year to $937.1 million, primarily driven by higher Permian natural gas inlet volumes, which boosted fee-based margin, partially offset by lower commodity prices.
Total Permian plant natural gas inlet volumes averaged 6,730 MMcf/d, up 12% year over year. The improvement was supported by the Pembrook II, Bull Moose II and Falcon II plants, continued producer activity and the acquisition of certain Permian Basin assets in the first quarter.
Logistics and Transportation: This unit reflects TRGP’s downstream operations. The segment’s operating margin increased 20% year over year to $773.3 million, and beat the Zacks Consensus Estimate of $783 million, while adjusted operating margin rose 18% to $873.5 million. The improvement was driven by higher marketing margin and stronger pipeline transportation and fractionation margin.
NGL pipeline transportation volumes averaged 1,016.8 MBbl/d, up 21% year over year. Fractionation volumes averaged 1,145.2 MBbl/d, up 17%. Export volumes declined 2% year over year to 437 MBbl/d, affected by the outage at a portion of the Galena Park export facility.
TRGP’s Costs, Capex & Balance Sheet
Product purchases and fuel declined 26% year over year to $2.39 billion, reflecting lower NGL and natural gas prices, partly offset by higher volumes. Operating expenses rose 10% to $333.7 million, mainly due to higher labor and maintenance costs from increased activity, system expansions and the Permian asset acquisition.
The company spent $914.4 million on growth capital programs compared with $594.5 million in the year-ago period. While maintenance capital expenditures were $37.6 million compared with $47.3 million in the year-ago period, adjusted free cash flow was $227.9 million.
As of March 31, 2026, TRGP had cash and cash equivalents of $100.1 million and long-term debt of $18.4 billion, with a debt-to-capitalization of around 85.5%.
TRGP’s Project Updates
Targa completed the Falcon II processing plant in Permian Delaware in February 2026 and the East Pembrook plant in Permian Midland in late March. The company also completed Train 11 in Mont Belvieu in April and began start-up operations for its Delaware Express NGL Pipeline expansion in May.
Targa announced two new Permian Delaware processing plants — Roadrunner III and Copperhead II — expected to begin operations in the first quarter of 2028. The company’s investor presentation shows several other major projects underway, including Train 12, Train 13, Speedway, the GPMT LPG Export Expansion and residue gas pipeline projects.
TRGP’s 2026 Guidance
The company expects a stronger 2026 financial performance, supported by continued growth across the Permian gathering and processing footprint and record volumes through its integrated NGL system. Management guided to a 2026 adjusted EBITDA of approximately $5.7 billion to $5.9 billion, representing roughly 17% year-over-year growth, driven by higher throughput volumes, strength in marketing and optimization activities and contributions from recently completed and ongoing expansion projects. The company also plans to invest about $4.5 billion in net growth capital expenditures during 2026, while maintenance capital is expected to total roughly $250 million.
Importantly, more than 90% of expected EBITDA is projected to be fee-based, providing greater cash flow stability and limiting direct exposure to commodity price volatility.
Overall, management’s outlook reflects confidence in sustained producer activity, rising infrastructure demand in the Permian Basin and continued operating momentum heading into 2026. TRGP currently carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Important Earnings at a Glance
While we have discussed TRGP’s first-quarter results in detail, let us take a look at three other key reports in this space.
Houston, TX-based oil and gas equipment and services provider, Halliburton Company (HAL - Free Report) , posted first-quarter 2026 adjusted net income per share of 55 cents, beating the Zacks Consensus Estimate of 49 cents. The outperformance primarily reflects successful cost reduction initiatives. However, the bottom line fell from the year-ago adjusted profit of 60 cents.
Halliburton reported first-quarter capital expenditure of $192 million. As of March 31, 2026, this oil and gas equipment and services company had approximately $2 billion in cash/cash equivalents and $7.1 billion in long-term debt, representing a debt-to-capitalization ratio of 39.6.
Houston, TX-based oil and gas storage and transportation company, Kinder Morgan Inc. (KMI - Free Report) , posted first-quarter 2026 adjusted earnings per share of 48 cents, which beat the Zacks Consensus Estimate of 38 cents. The bottom line increased year over year from 34 cents. The strong quarterly results can be primarily attributed to contributions from the Natural Gas Pipelines business segment.
As of March 31, 2026, KMI reported $72 million in cash and cash equivalents. At the quarter's end, its long-term debt amounted to $29.72 billion. KMI’s project backlog was reported at $10.1 billion by the end of the first quarter. The midstream energy major added that natural gas projects comprise approximately 92% of its project backlog, with nearly 60% dedicated to supporting local distribution companies and power generation.
Fort Worth, TX-based oil and gas exploration and production company, Range Resources Corporation (RRC - Free Report) , posted first-quarter 2026 adjusted earnings of $1.52 per share, which beat the Zacks Consensus Estimate of $1.33. The bottom line also improved from the prior-year level of 96 cents. Strong quarterly results can be attributed to higher gas-equivalent production and increased natural gas price realization.
Drilling and completion expenditure totaled $130 million. An additional $5 million was spent on acreage and $4 million on infrastructure and other investments. At the end of the first quarter, Range Resources reported a total debt of $819.3 million, net of deferred financing costs.
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TRGP Q1 Earnings & Revenues Miss Estimates, Adjusted EBITDA Up Y/Y
Key Takeaways
Targa Resources Corp. (TRGP - Free Report) reported first-quarter 2026 earnings of $2.21 per share, which missed the Zacks Consensus Estimate of $2.55. The underperformance can be attributed to severe winter weather that impacted volumes across its systems, weak Waha natural gas prices that led to producer curtailments in the Permian Basin during the quarter and higher operating expenses related to maintenance activity, system expansions and acquired Permian assets.
The bottom line, however, increased from the year-ago quarter’s level of 91 cents. The year-over-year improvement can be attributed to higher operating margins in the company’s Gathering and Processing and Logistics and Transportation segments.
Total quarterly revenues of $4.1 billion missed the Zacks Consensus Estimate of $5.1 billion by 19.64%. Revenues also declined 10% from the year-ago quarter’s level of $4.6 billion, primarily due to lower commodity sales, partly offset by higher fees from midstream services.
Targa Resources, Inc. Price, Consensus and EPS Surprise
Targa Resources, Inc. price-consensus-eps-surprise-chart | Targa Resources, Inc. Quote
Despite the revenue miss, Targa delivered record first-quarter adjusted EBITDA of $1.4 billion, up 19% from the prior-year quarter. The increase was driven by record Permian inlet volumes, record fractionation volumes and higher marketing margins.
Taking a Closer Look at Q1 Results
On April 16, 2026, Houston, TX-based oil and gas storage and transportation company declared a quarterly dividend of $1.25 per share, or $5 annualized, representing a 25% increase from the first-quarter 2025 dividend. The company also repurchased $55 million of common stock during the quarter.
In the first quarter, Targa benefited from continued strength across its integrated Permian-to-Mont Belvieu footprint. Management mentioned that the company still achieved record first-quarter adjusted EBITDA, Permian volumes and NGL fractionation volumes despite winter weather and periodic shut-ins. The company also mentioned that current Permian volumes were running more than 250 million cubic feet per day above the first-quarter average, even with 200-400 million cubic feet per day of temporary producer shut-ins on any given day.
TRGP’s Segmental Performance
Gathering and Processing: The segment’s operating margin was $703.5 million, up 17% from $602.2 million in the year-ago quarter. However, the figure missed the Zacks Consensus Estimate of $757 million. Adjusted operating margin increased 16% year over year to $937.1 million, primarily driven by higher Permian natural gas inlet volumes, which boosted fee-based margin, partially offset by lower commodity prices.
Total Permian plant natural gas inlet volumes averaged 6,730 MMcf/d, up 12% year over year. The improvement was supported by the Pembrook II, Bull Moose II and Falcon II plants, continued producer activity and the acquisition of certain Permian Basin assets in the first quarter.
Logistics and Transportation: This unit reflects TRGP’s downstream operations. The segment’s operating margin increased 20% year over year to $773.3 million, and beat the Zacks Consensus Estimate of $783 million, while adjusted operating margin rose 18% to $873.5 million. The improvement was driven by higher marketing margin and stronger pipeline transportation and fractionation margin.
NGL pipeline transportation volumes averaged 1,016.8 MBbl/d, up 21% year over year. Fractionation volumes averaged 1,145.2 MBbl/d, up 17%. Export volumes declined 2% year over year to 437 MBbl/d, affected by the outage at a portion of the Galena Park export facility.
TRGP’s Costs, Capex & Balance Sheet
Product purchases and fuel declined 26% year over year to $2.39 billion, reflecting lower NGL and natural gas prices, partly offset by higher volumes. Operating expenses rose 10% to $333.7 million, mainly due to higher labor and maintenance costs from increased activity, system expansions and the Permian asset acquisition.
The company spent $914.4 million on growth capital programs compared with $594.5 million in the year-ago period. While maintenance capital expenditures were $37.6 million compared with $47.3 million in the year-ago period, adjusted free cash flow was $227.9 million.
As of March 31, 2026, TRGP had cash and cash equivalents of $100.1 million and long-term debt of $18.4 billion, with a debt-to-capitalization of around 85.5%.
TRGP’s Project Updates
Targa completed the Falcon II processing plant in Permian Delaware in February 2026 and the East Pembrook plant in Permian Midland in late March. The company also completed Train 11 in Mont Belvieu in April and began start-up operations for its Delaware Express NGL Pipeline expansion in May.
Targa announced two new Permian Delaware processing plants — Roadrunner III and Copperhead II — expected to begin operations in the first quarter of 2028. The company’s investor presentation shows several other major projects underway, including Train 12, Train 13, Speedway, the GPMT LPG Export Expansion and residue gas pipeline projects.
TRGP’s 2026 Guidance
The company expects a stronger 2026 financial performance, supported by continued growth across the Permian gathering and processing footprint and record volumes through its integrated NGL system. Management guided to a 2026 adjusted EBITDA of approximately $5.7 billion to $5.9 billion, representing roughly 17% year-over-year growth, driven by higher throughput volumes, strength in marketing and optimization activities and contributions from recently completed and ongoing expansion projects. The company also plans to invest about $4.5 billion in net growth capital expenditures during 2026, while maintenance capital is expected to total roughly $250 million.
Importantly, more than 90% of expected EBITDA is projected to be fee-based, providing greater cash flow stability and limiting direct exposure to commodity price volatility.
Overall, management’s outlook reflects confidence in sustained producer activity, rising infrastructure demand in the Permian Basin and continued operating momentum heading into 2026. TRGP currently carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Important Earnings at a Glance
While we have discussed TRGP’s first-quarter results in detail, let us take a look at three other key reports in this space.
Houston, TX-based oil and gas equipment and services provider, Halliburton Company (HAL - Free Report) , posted first-quarter 2026 adjusted net income per share of 55 cents, beating the Zacks Consensus Estimate of 49 cents. The outperformance primarily reflects successful cost reduction initiatives. However, the bottom line fell from the year-ago adjusted profit of 60 cents.
Halliburton reported first-quarter capital expenditure of $192 million. As of March 31, 2026, this oil and gas equipment and services company had approximately $2 billion in cash/cash equivalents and $7.1 billion in long-term debt, representing a debt-to-capitalization ratio of 39.6.
Houston, TX-based oil and gas storage and transportation company, Kinder Morgan Inc. (KMI - Free Report) , posted first-quarter 2026 adjusted earnings per share of 48 cents, which beat the Zacks Consensus Estimate of 38 cents. The bottom line increased year over year from 34 cents. The strong quarterly results can be primarily attributed to contributions from the Natural Gas Pipelines business segment.
As of March 31, 2026, KMI reported $72 million in cash and cash equivalents. At the quarter's end, its long-term debt amounted to $29.72 billion. KMI’s project backlog was reported at $10.1 billion by the end of the first quarter. The midstream energy major added that natural gas projects comprise approximately 92% of its project backlog, with nearly 60% dedicated to supporting local distribution companies and power generation.
Fort Worth, TX-based oil and gas exploration and production company, Range Resources Corporation (RRC - Free Report) , posted first-quarter 2026 adjusted earnings of $1.52 per share, which beat the Zacks Consensus Estimate of $1.33. The bottom line also improved from the prior-year level of 96 cents. Strong quarterly results can be attributed to higher gas-equivalent production and increased natural gas price realization.
Drilling and completion expenditure totaled $130 million. An additional $5 million was spent on acreage and $4 million on infrastructure and other investments. At the end of the first quarter, Range Resources reported a total debt of $819.3 million, net of deferred financing costs.