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Research Alert: CFRA Lifts Opinion On Shares Of Targa Resources Corp. To Hold From Sell

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CFRA, an independent research provider, has providedwith the following research alert. Analysts at CFRA have summarized their opinion as follows:

Our 12-month target price of $280 (raised by $73) reflects a combination of relative valuation and a DCF model analysis. On a relative basis, we apply a 12.5x multiple of enterprise value to projected 2027 EBITDA. The applied multiple is a premium to TRGP's historical forward average, but below its peak multiple over the last five years. While we had previously argued for an in-line multiple, we think the advent of constrained supplies out of the Middle East likely places a premium on others with the ability to help transport both LNG and NGLs to U.S. export terminals. On this basis, we find a value of $275 per share. Meanwhile, our DCF model, using a medium-term free cash flow growth rate of 8.3% per year and 2.5% thereafter, discounted at a WACC of 5.2%, yields a value of $285 per share. We raise our 2026 EPS estimate by $1.16 to $11.20 and 2027's by $0.20 to $11.65. We think TRGP is likely to outspend its cash flows in 2026 but will likely revert to a margin of safety in 2027.

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