Targa Resources (TRGP) Gets a Fresh Vote of Confidence from TD Cowen

TD Cowen has upgraded Targa Resources (TRGP) to a Buy rating, citing a 20% upside potential from current levels. The firm attributes this change to Targa's expected growth in the Permian Basin and improved free cash flow yield. Targa signed a 20-year fee-based agreement with ExxonMobil, which is expected to increase visibility into future volumes and infrastructure demand.

The company also plans to build three new processing plants in the Permian Delaware, with an aggregate capacity of 825 MMcf/day. In Q2 2026, Targa reported a record adjusted EBITDA of $1.60 billion, up 38% year-over-year, and expects full-year 2026 adjusted EBITDA to be at the top end of its previous guidance range. However, the company faces concerns regarding the substantial capital investment required to realize the anticipated volume growth.