TRGP
Targa Resources Corp.
$276.75
Stable Earnings Power
80%
P/Adj-EPS × Normalized Multiple
Moderate
·
Conviction
Overvalued
Trading 30.3% above fair value
You pay
$276.75
Bear
$169.92
Fair
$212.41
Bull
$254.89
Bear
$169.92
-38.6%
$9.13 × 17x P/E
Fair
$212.41
-23.2%
$9.13 × 21x P/E
Bull
$254.89
-7.9%
$9.13 × 25x P/E
Key Value Driver
Normalized P/E multiple (21x base case)
Implied Market Multiple
30.3x
Summary
Our base-case estimate uses a valuation based on adjusted earnings per share and a normalized price-to-earnings multiple. We then blend that result with the average analyst price target of $266.00 from 34 analysts, using a 30% weight on analyst consensus. That produces an estimated intrinsic value of $212.41 per share.
Warnings
Wall Street's average price target is $266.00 (from 34 analysts). Our estimate is 29% below the consensus -- consider that gap carefully.
Key Risks
- Growth DCF inappropriate — terminal value assumptions dominate
- EV/EBITDA misleading for regulated businesses where capex is mandated
- Regulatory risk is a fat tail not visible in normal multiples