BMO Optimistic About US Gas Midstream Stocks Due to Power Demand
Written by Emily J. Thompson, Senior Investment Analyst
Updated: Sep 19 2025
0mins
Source: Yahoo Finance
BMO Capital Markets Coverage: BMO Capital Markets has initiated coverage of U.S. midstream energy companies with bullish ratings, highlighting the impact of rising global electricity demand on investments in natural gas infrastructure.
Top Picks and Market Outlook: The brokerage favors Williams, Kinder Morgan, Cheniere Energy, and Targa Resources, citing their strong positions and the potential for growth due to more stable contracts and improved balance sheets, despite historical market discounts.
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Analyst Views on TRGP
Wall Street analysts forecast TRGP stock price to fall
8 Analyst Rating
8 Buy
0 Hold
0 Sell
Strong Buy
Current: 227.620
Low
188.00
Averages
214.75
High
266.00
Current: 227.620
Low
188.00
Averages
214.75
High
266.00
About TRGP
Targa Resources Corp. is a provider of midstream services in North America. The Company owns, operates, acquires and develops a diversified portfolio of complementary domestic midstream infrastructure assets and delivers energy across the United States. The Company is engaged in the business of gathering, compressing, treating, processing, transporting, and purchasing and selling natural gas; transporting, storing, fractionating, treating, and purchasing and selling natural gas liquids (NGLs) and NGL products, including services to liquefied petroleum gas (LPG) exporters; and gathering, storing, terminaling, and purchasing and selling crude oil. Its segments are Gathering and Processing, and Logistics and Transportation. Gathering and Processing segment includes assets used in the gathering and/or purchase and sale of natural gas produced from oil and gas wells. Logistics and Transportation segment includes the activities and assets necessary to convert mixed NGLs into NGL products.
About the author
Emily J. Thompson
Emily J. Thompson, a Chartered Financial Analyst (CFA) with 12 years in investment research, graduated with honors from the Wharton School. Specializing in industrial and technology stocks, she provides in-depth analysis for Intellectia’s earnings and market brief reports.
Targa Resources Set to Announce Q4 Earnings on February 19
- Earnings Announcement Schedule: Targa Resources is set to release its Q4 earnings on February 19 before market open, with consensus EPS estimates at $2.40 and revenue expectations at $4.14 billion, highlighting market focus on the company's profitability.
- Earnings Estimate Changes: Over the last three months, Targa's EPS estimates have seen two upward revisions with no downward adjustments, indicating increased analyst confidence in the company's earnings potential, although revenue estimates experienced one upward and two downward revisions, reflecting cautious market sentiment regarding future growth.
- Industry Outlook Analysis: Market analysis suggests that industry shrinkage may signal a potential recession, casting uncertainty on future growth prospects for Targa Resources, which may face significant market challenges and will need to implement effective strategies to navigate this uncertainty.
- Investor Movements: The Oakmark Select Fund Investor Class increased its stake in Targa Resources during Q4 while exiting positions in CHTR and GLIBK, demonstrating investor confidence in TRGP and optimism regarding its future performance.
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Targa Resources Reports Q4 Earnings Miss Amid Industry Concerns
- Earnings Overview: Targa Resources reported a Q4 net income of $545 million, with revenues declining 7.9% year-over-year to $4.06 billion, missing market expectations by $80 million, which raises investor concerns about future growth prospects.
- Industry Outlook: Clear signs of industry shrinkage have emerged, with analysts warning of a potential recession that could impact Targa Resources' growth trajectory, leading to diminished confidence in its long-term profitability.
- Rating Upgrade: Despite the challenges, Targa Resources received a rating upgrade, reflecting analysts' optimism about its potential growth opportunities, particularly in the context of a possible industry recovery that may attract more investor interest.
- Market Performance: Josh Brown from Ritholtz Wealth highlighted Targa Resources, GWW, and CTVA as the best stocks in the market, indicating that despite short-term challenges, there remains a positive outlook among some investors regarding its future performance.
See More
Targa Resources Reports Strong 2025 Financial Results with Record EBITDA
- Significant Net Income Growth: Targa Resources reported a net income of $545 million for Q4 2025, a 55% increase from $351 million in Q4 2024, demonstrating the company's strong performance and enhanced profitability in the market.
- Record Adjusted EBITDA: The full-year adjusted EBITDA for 2025 reached $4.957 billion, a 20% increase from $4.142 billion in 2024, reflecting robust growth in the company's transportation and processing operations in the Permian Basin.
- Ongoing Stock Buyback Program: In 2025, Targa repurchased 3.765 million shares of common stock at a total cost of $642 million, showcasing the company's confidence in its stock value and creating additional value for shareholders.
- Optimistic Future Outlook: The company estimates adjusted EBITDA for 2026 to be between $5.4 billion and $5.6 billion, an 11% increase over 2025, and plans to raise the annual dividend per share by 25% to $5.00, further enhancing shareholder returns.
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Natural Gas Demand Surge Draws Market Attention
- Surge in Natural Gas Demand: The massive snowstorm has led to a significant rise in natural gas demand, drawing attention to midstream companies like Targa Resources, whose stock is nearing all-time highs, reflecting market interest in energy infrastructure.
- Strong Performance by Targa Resources: Targa Resources reported a record adjusted EBITDA of $1.27 billion for Q3 2025, a 19% year-over-year increase, with net income reaching $478.4 million, showcasing robust growth in the natural gas transmission sector.
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- Corteva Raises Guidance: Corteva has raised its full-year 2025 EBITDA guidance to between $3.8 billion and $3.9 billion, representing a 14% growth, highlighting strong performance and renewed market confidence in the agricultural sector.
See More
Targa Resources Set to Announce Q4 Earnings on February 19
- Earnings Announcement Schedule: Targa Resources is set to release its Q4 earnings on February 19 before market open, with consensus EPS estimates at $2.40 and revenue expectations at $4.14 billion, highlighting market focus on the company's profitability.
- Earnings Estimate Changes: Over the last three months, Targa's EPS estimates have seen two upward revisions with no downward adjustments, indicating increased analyst confidence in the company's earnings potential, although revenue estimates experienced one upward and two downward revisions, reflecting cautious market sentiment regarding future growth.
- Industry Outlook Analysis: Market analysis suggests that industry shrinkage may signal a potential recession, casting uncertainty on future growth prospects for Targa Resources, which may face significant market challenges and will need to implement effective strategies to navigate this uncertainty.
- Investor Movements: The Oakmark Select Fund Investor Class increased its stake in Targa Resources during Q4 while exiting positions in CHTR and GLIBK, demonstrating investor confidence in TRGP and optimism regarding its future performance.
See More
Targa Resources Reports Q4 Earnings Miss Amid Industry Concerns
- Earnings Overview: Targa Resources reported a Q4 net income of $545 million, with revenues declining 7.9% year-over-year to $4.06 billion, missing market expectations by $80 million, which raises investor concerns about future growth prospects.
- Industry Outlook: Clear signs of industry shrinkage have emerged, with analysts warning of a potential recession that could impact Targa Resources' growth trajectory, leading to diminished confidence in its long-term profitability.
- Rating Upgrade: Despite the challenges, Targa Resources received a rating upgrade, reflecting analysts' optimism about its potential growth opportunities, particularly in the context of a possible industry recovery that may attract more investor interest.
- Market Performance: Josh Brown from Ritholtz Wealth highlighted Targa Resources, GWW, and CTVA as the best stocks in the market, indicating that despite short-term challenges, there remains a positive outlook among some investors regarding its future performance.
See More
Targa Resources Reports Strong 2025 Financial Results with Record EBITDA
- Significant Net Income Growth: Targa Resources reported a net income of $545 million for Q4 2025, a 55% increase from $351 million in Q4 2024, demonstrating the company's strong performance and enhanced profitability in the market.
- Record Adjusted EBITDA: The full-year adjusted EBITDA for 2025 reached $4.957 billion, a 20% increase from $4.142 billion in 2024, reflecting robust growth in the company's transportation and processing operations in the Permian Basin.
- Ongoing Stock Buyback Program: In 2025, Targa repurchased 3.765 million shares of common stock at a total cost of $642 million, showcasing the company's confidence in its stock value and creating additional value for shareholders.
- Optimistic Future Outlook: The company estimates adjusted EBITDA for 2026 to be between $5.4 billion and $5.6 billion, an 11% increase over 2025, and plans to raise the annual dividend per share by 25% to $5.00, further enhancing shareholder returns.
See More
Key Companies to Monitor This Week: PCE, Walmart, Palo Alto, Analog Devices, Deere, and Others
- Market Performance: Equities experienced a decline last week, with all three major indexes falling by at least 1.2%.
- Economic Indicators: This downturn occurred despite a better-than-expected jobs report from the Bureau of Labor Statistics and a relatively stable inflation report.
See More
Powell's Tenure Nears End, Market Focuses on His Legacy
- Monetary Policy Balance: As Fed Chair Powell's tenure approaches its end, the market is keenly focused on his performance in balancing maximum employment and stable prices, especially with the upcoming release of the latest meeting minutes, marking one of his final meetings in office.
- Interest Rate Challenges: During Powell's leadership, the Fed has navigated emergency interventions and an aggressive rate-hiking cycle, with the benchmark rate rising from near zero to over 5%; despite initially viewing inflation as 'transitory,' achieving a 'soft landing' for the economy will be a key part of his legacy.
- Market Reaction Expectations: Investors are optimistic about the upcoming personal consumption expenditure data, although the cooler-than-expected CPI could impact the Fed's interest rate outlook, with markets currently pricing in only two quarter-point cuts for the year.
- Industry Dynamics Observation: As concerns over AI disruption grow, stocks in software, finance, and real estate have seen declines, prompting investors to search for the next potentially affected sectors, with Walmart and Deere's upcoming earnings reports likely to be focal points for market attention.
See More
Natural Gas Demand Surge Draws Market Attention
- Surge in Natural Gas Demand: The massive snowstorm has led to a significant rise in natural gas demand, drawing attention to midstream companies like Targa Resources, whose stock is nearing all-time highs, reflecting market interest in energy infrastructure.
- Strong Performance by Targa Resources: Targa Resources reported a record adjusted EBITDA of $1.27 billion for Q3 2025, a 19% year-over-year increase, with net income reaching $478.4 million, showcasing robust growth in the natural gas transmission sector.
- Devon Energy Merger Talks: Devon Energy achieved an oil production average of 390,000 barrels per day in Q3 2025 and is in discussions to merge with Coterra Energy, potentially creating a $57 billion independent U.S. shale producer, indicating a trend towards industry consolidation.
- Corteva Raises Guidance: Corteva has raised its full-year 2025 EBITDA guidance to between $3.8 billion and $3.9 billion, representing a 14% growth, highlighting strong performance and renewed market confidence in the agricultural sector.
See More
