Targa Resources Corp. (TRGP) DCF Valuation
A meaningful DCF fair value isn't available for Targa Resources Corp. (TRGP) — its free-cash-flow and net-debt profile makes a standard discounted-cash-flow model unreliable (common for loss-makers and high-net-debt or recently-public companies), and no analyst DCF is published. Explore your own assumptions with the editable model below.
What would today's price require?
$264.51 is justified only if free cash flow grows about +43.1% a year (fading to 2.5% long-run) at a 7.7% required return — faster than the company has actually grown.
| Scenario | FCF growth (fading to 2.5%) | Discount | Value / share |
|---|---|---|---|
| Conservative | 7.0%/yr | 8.7% | N/A |
| Base case | 10.0%/yr | 7.7% | $16.60 |
| Optimistic | 13.0%/yr | 6.7% | $56.17 |
Current Price
$264.51
Market-Implied Growth
+43.1%/yr
vs +10.0% 5Y actual
Base-Case Model Value
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TRGP DCF Fair Value Calculator
Edit the assumptions to see how they change the estimated fair value. Opens seeded with TGM's data-driven base case for TRGP (growth from its own 5-year record, discount from its beta), so the sandbox starts where the scenarios above leave off. Illustrative model — not investment advice.
Base inputs: FCF $755.0M · 0.21B shares · net debt $16.9B
Estimated Fair Value
$46.44
-82.4% vs $264.51
Sensitivity — fair value by discount rate × terminal growth
How the estimated fair value shifts with the discount rate (WACC) and terminal growth, holding your 10.0%/yr FCF growth and 10-year horizon fixed. Green = above today's $264.51; red = below. Your current case is outlined.
| WACC ↓ / Terminal → | 1.50% | 2.00% | 2.50% | 3.00% | 3.50% |
|---|---|---|---|---|---|
| 5.7% | $91.96 | $110 | $133 | $165 | $212 |
| 6.7% | $56.07 | $66.48 | $79.37 | $95.75 | $117 |
| 7.7% | $31.93 | $38.55 | $46.44 | $56.02 | $67.87 |
| 8.7% | $14.63 | $19.09 | $24.28 | $30.37 | $37.63 |
| 9.7% | $1.66 | $4.80 | $8.38 | $12.49 | $17.26 |
About Targa Resources Corp.
Targa Resources Corp., alongside its subsidiary Targa Resources Partners LP, is a significant entity in the North American midstream energy sector, focusing on the ownership, operation, acquisition, and development of crucial energy infrastructure assets. Its business is structured into two main divisions: "Gathering and Processing" and "Logistics and Transportation." Within these segments, the company undertakes a broad range of activities, including the collection, compression, treatment, processing, transport, and sale of natural gas. It also manages the storage, fractionation, treatment, transportation, and distribution of natural gas liquids (NGLs) and their associated products, providing services even to liquefied petroleum gas (LPG) exporters. Furthermore, Targa handles the gathering, storage, terminaling, purchasing, and selling of crude oil. Beyond these core operations, the company is involved in the procurement and resale of NGL products, wholesale propane distribution, and providing related logistics support to a diverse clientele, including multi-state retailers, independent businesses, and end-users. It also offers NGL balancing services and transportation solutions for refineries and petrochemical companies situated in the Gulf Coast region, while actively purchasing, marketing, and reselling natural gas. The company's extensive asset base features approximately 28,400 miles of natural gas pipelines, including 42 owned and managed processing plants, and it operates 34 storage wells with a substantial gross capacity of about 76 million barrels. As of December 31, 2021, its transportation fleet comprised approximately 648 leased and managed railcars, 119 transport tractors, and two company-owned pressurized NGL barges. Targa Resources Corp. was established in 2005 and is headquartered in Houston, Texas.
- Sector
- Energy
- Industry
- Oil & Gas Midstream
- CEO
- Matthew J. Meloy