Targa raises 2026 EBITDA forecast to $6.0 billion; Q3 revenue tops estimates

Targa Resources (TRGP) raised its full-year 2026 adjusted EBITDA forecast to at least $6.0 billion and reported third-quarter revenue of $5.60 billion, above the $4.85 billion consensus estimate.

Shares were little changed at 10:02 a.m. ET, from a $285.00 close.

Third-quarter adjusted EBITDA rose 18% from a year earlier.

Here's how the company did:

• Adjusted EBITDA: $1.50 billion vs. $1.27 billion a year earlier
• Revenue: $5.60 billion vs. $4.15 billion a year earlier, against $4.85 billion expected
• Net income attributable to Targa: $658.2 million vs. $478.4 million a year earlier

Adjusted EBITDA fell 6% from the second quarter. The company said the decline reflected lower marketing margin and lower LPG export margin.

Record Permian inlet volumes in Gathering and Processing and record NGL transportation and fractionation volumes in Logistics and Transportation offset those declines.

2026 guidance

Targa now expects full-year 2026 adjusted EBITDA of at least $6.0 billion, up from the $5.7 billion to $5.9 billion range it gave on Aug. 6.

Net growth capital expenditures are about $5.0 billion, up from about $4.5 billion in August. Net maintenance capital expenditures are unchanged at about $250 million.

Segment results

Gathering and Processing adjusted operating margin rose 22% to $1.07 billion from $873.7 million a year earlier. Higher natural gas inlet volumes in the Permian drove higher fee-based margin.

Logistics and Transportation adjusted operating margin rose 10% to $888.1 million from $808.8 million, on higher pipeline transportation and fractionation margin and higher marketing margin.

Growth projects

The Copperhead plant in the Permian Delaware is in start-up, ahead of schedule. Yeti and Yeti II plants are expected to begin operations in the second quarter and third quarter of 2027, earlier than previously expected.

Train 12 fractionator and the Bull Run Extension intra-basin residue pipeline have commenced operations, also ahead of schedule.

Targa announced 20-year, fee-based integrated midstream agreements with subsidiaries of ExxonMobil in August, and three new Permian Delaware gas processing plants, Wrangler, Ranger and Ranger II, to support them.

Targa is ordering long-lead items for another Permian Midland plant and two more Permian Delaware plants, likely needed in 2028 or early 2029.

Train 14, a new 150 thousand barrel per day NGL fractionator in Mont Belvieu, Texas, is expected to begin operations in the first quarter of 2029.

Dividends, buybacks and debt

Targa declared a quarterly dividend of $1.25 per share on Oct. 13, a 25% increase over the third quarter of 2025. Payments of about $268 million are due Nov. 17 to holders of record on Oct. 30.

Management intends to recommend $1.50 per share for the first quarter of 2027, or $6.00 annualized, up from $1.25. It expects to recommend an annual common dividend of $6.00 per share in 2027, a 20% increase on 2026.

Targa repurchased 180,768 shares in the third quarter at a weighted average price of $287.64, for a net cost of $52 million. $1.19 billion remained under its share repurchase programs as of Sept. 30.

Total consolidated debt was $19.8 billion as of Sept. 30, and liquidity was about $2.9 billion, including $2.6 billion available under the TRGP Revolver.