Is TRGP a good stock to buy? We came across a bullish thesis on Targa Resources Corp. on Beyond the Noise’s Substack by Cristobal Botanch. In this article, we will summarize the bulls’ thesis on TRGP. Targa Resources Corp.’s share was trading at $240.69 as of April 24th. TRGP’s trailing and forward P/E were 28.35 and 22.83 respectively according to Yahoo Finance.
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Targa Resources (TRGP) is a leading integrated midstream operator in the Permian Basin, with its investment case driven by a structural shift in natural gas and NGL volumes rather than commodity cyclicality. The company benefits from accelerating Permian output, with gas volumes up 11% in 2025 and a record 6.65 Bcf/d in Q4, supported by rising gas-oil ratios and deeper drilling that structurally increase gas intensity.
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Targa Resources delivered record EBITDA of $4.96 billion, up 20% year over year, and guided 2026 EBITDA of $5.4–5.6 billion, with visibility above $6 billion post-Speedway expansion in 2027. The company is expanding aggressively with eight new processing plants, 2.2 Bcf/d of incremental capacity, and the Speedway system, strengthening its wellhead-to-water integration. With over 90% fee-based cash flows and contractual protections, Targa Resources has strong downside insulation and minimal commodity sensitivity of under 2% of EBITDA even in ±30% price moves. The business is evolving into a high-throughput “free-flow machine,” converting Permian growth directly into stable cash generation.
EBITDA is expected to rise another 11% in 2026 even under conservative assumptions, while post-2027 capex normalization drives a meaningful free cash flow inflection. Leverage remains stable at ~3.5x, with no cash taxes expected for five years, enhancing equity compounding.
While risks include Permian activity slowdown or project delays, Targa Resources remains well positioned within a structurally supportive LNG export-driven gas cycle. Overall, TRGP offers a highly visible multi-year growth story with strong earnings momentum, resilient cash flow, and a bullish setup into 2027.
Previously, we covered a bullish thesis on Kinder Morgan, Inc. (KMI) by Gregg Jahnke in October 2024, which highlighted backlog-driven growth, regulatory approvals, and macro tailwinds from AI-linked demand and U.S. reshoring. KMI’s stock price has appreciated by approximately 27.93% since our coverage. Cristobal Botanch shares a similar view but emphasizes Permian-led structural gas volume expansion and fee-based cash flow compounding.
Targa Resources Corp. is not on our list of the 40 Most Popular Stocks Among Hedge Funds. As per our database, 45 hedge fund portfolios held TRGP at the end of the fourth quarter which was 50 in the previous quarter. While we acknowledge the risk and potential of TRGP as an investment, our conviction lies in the belief that some AI stocks hold greater promise for delivering higher returns and doing so within a shorter time frame. If you are looking for an AI stock that is more promising than TRGP and that has 10,000% upside potential, check out our report about this cheapest AI stock.
Disclosure: None.
