Earnings estimates for Targa Resources, Inc. (TRGP - Free Report) have been revised upward over the past 60 days, reflecting analyst’s confidence in the stock. The Zacks Consensus Estimate for 2018 and 2019 earnings has moved 675% and 20.9% north to 27 cents and 52 cents per share, respectively.
Also, the Zacks Consensus Estimate for current-year earnings per share reflects a significant year-over-year surge of 162.8%. For 2019, the consensus estimate for EPS is depicting a 94.5% year-over-year rise.
Targa Resources owns general and limited partner interests in Targa Resources Partners LP, engaged in providing midstream natural gas and natural gas liquid services in the United States. Targa Resources is headquartered in Houston, TX.
Let’s focus on the factors that make Targa Resources an attractive stock to hold on to for greater returns.
Price Appreciation: Shares of Targa Resources have rallied 21.3% in a year’s time against the industry’s decline of 1.2%. The stock carries a Zacks Rank #2 (Buy).
VGM Score: The stock has a favorable VGM Score of B. Here V stands for Value, G for Growth and M for Momentum with the score being a weighted combination of all three factors. Back tested results show that stocks with an impressive VGM Score of A or B coupled with a top Zacks Rank offer the best investment bets.
Earnings Results & Surprise History: The company delivered earnings of 35 cents per share in second-quarter 2018, beating the Zacks Consensus Estimate of a loss of 5 cents by 800%. Boasting an encouraging earnings surprise history, the company’s bottom line surpassed the Zacks Consensus Estimate with the average positive surprise being 141.7%.
Focus on Permian Basin: Recently, the company announced that it has entered into an agreement to jointly develop the proposed Whistler Pipeline Project, which will provide an outlet for increased natural gas production from the Permian Basin to growing markets along the Texas Gulf Coast. The Whistler Project is designed to transport approximately 2 Bcf/d of natural gas from Waha, TX to NextEra Energy Resources, LLC’s Agua Dulce market hub. This participation in an additional strategic residue gas pipeline will further enhance Targa's Permian Basin asset positioning and midstream service offerings to its customers.
The company’s Joyce Plant in the Permian Basin came online during second-quarter 2018. Also, the company's Johnson Plant with a capacity of 200 million cubic feet per day (Mcf/d) will likely to boost the production capacity further. Moreover, the company is likely to reach a target of 3.5 Bcf/d of total gross natural gas processing capacity from the Permian Basin by second-quarter 2020.
Capital Spending: The company is focusing on strengthening and growing its natural gas processing capacity by adding more than 2 billion cubic feet per day (Bcf/d) coupled with infrastructural expansion over the 2018-2020 period. It anticipates to incur a capex of nearly $2.2 billion in 2018 with 75% of the same being focused on Permian Basin.
Other Stocks to Consider
Some other top-ranked stocks from the Zack Oil & Gas Industry are Denbury Resources Inc. (DNR - Free Report) , TC PipeLines, LP (TCP - Free Report) and Northern Oil and Gas, Inc. (NOG - Free Report) , each holding a Zacks Rank of 2. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Denbury Resources pulled off an average positive surprise of 162.86% in all the trailing four quarters. The Zacks Consensus Estimate for 2018 EPS moved 20% north over the past 60 days to 48 cents.
TC PipeLines delivered an average positive surprise of 11.96% in all the last four quarters. The Zacks Consensus Estimate for 2018 earnings per unit has been revised 7.6% upward over the past 60 days to $3.81.
Northern Oil and Gas came up with an average positive surprise of 138.54% in all the preceding four quarters. The Zacks Consensus Estimate for 2018 EPS has been raised 19.6% over the past 60 days to 55 cents.
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