# Targa Resources Corp. (TRGP) — Financial Analysis

**Exchange:** NYSE  
**Coverage as of:** 2026-Q2  
**Updated:** 2026-05-29  
**Tier:** Free primer (step 2 of 19)  
**Sibling pages:** /stocks/TRGP/thesis · /stocks/TRGP/memo

## Financial Snapshot

---
source: coverage-next-full
ticker: TRGP
step: "04"
title: Financial Snapshot & Quality Analysis
created: 2026-05-29
---

### Step 04 — Financial Snapshot & Quality Analysis: Targa Resources Corp. (TRGP)

#### 1. Three-Year Financial Snapshot

| Metric | FY 2022 | FY 2023 | FY 2024 | YoY Change |
|--------|---------|---------|---------|------------|
| Revenue ($M) | 20,930 | 16,060 | 16,382 | +2.0% |
| Gross Profit ($M) | 3,135 | 4,306 | 4,503 | +4.6% |
| Gross Margin | 15.0% | 26.8% | 27.5% | +70bps |
| Operating Income ($M) | 1,729 | 2,626 | 2,695 | +2.6% |
| Operating Margin | 8.3% | 16.3% | 16.5% | +20bps |
| Adj. EBITDA ($M) | N/A | 3,530 | 4,142 | +17.3% |
| Net Income ($M) | 1,142 | 835.8 | 1,279 | +53.1% |
| EPS Diluted ($) | 3.88 | 3.66 | 5.74 | +56.8% |
| Operating CF ($M) | 2,381 | 3,212 | 3,650 | +13.6% |
| Capex ($M) | 1,540 | 2,385 | 2,966 | +24.4% |
| Free Cash Flow ($M) | 841.3 | 826.2 | 683.9 | -17.2% |
| Net Debt ($M) | 11,317 | 12,812 | 14,017 | +9.4% |
| Net Debt / EBITDA | 4.0x | 3.2x | 3.4x | +0.2x |
| ROIC | 10.3% | 11.8% | 11.1% | -70bps |

**Note:** FY 2022 revenue of $20.9B reflects elevated NGL/natural gas commodity prices (post-Ukraine energy shock) inflating the marketing line. Gross profit trajectory is more meaningful (rising despite lower revenue) as fee-based margins have expanded. [S2]

#### 2. Accounting Quality Assessment

##### Quality Flags (GREEN / AMBER / RED)

| Flag | Status | Comment |
|------|--------|---------|
| Revenue recognition | GREEN | Fee-based revenues recognized at point of service delivery; straightforward for midstream |
| Non-cash adjustments to EBITDA | AMBER | "Adjusted EBITDA" excludes equity-based comp, certain non-cash items — reasonable but warrants monitoring |
| Gross vs. net revenue | AMBER | Marketing revenues reported gross (inflates topline); adj. operating margin is the true economic measure |
| Depreciation rates | GREEN | D&A ~$1.4–1.5B/year in line with peer group for comparable asset base |
| Debt covenants | GREEN | New $3.5B revolver arranged Feb 2025; leverage covenants provide adequate headroom at 3.4x [S3] |
| SBC expense | AMBER | CEO total comp $14.2M FY2023 (largely equity-based); ISS score of 8/10 on compensation pillar (4/10) — elevated concern [S6] |
| Cash flow vs. net income | GREEN | Operating CF ($3.65B) substantially exceeds net income ($1.28B) due to heavy D&A add-back — expected for capital-intensive midstream; no red flags |
| Working capital | GREEN | Minimal working capital requirements; fee-based cash received monthly from producers |

##### Revenue Quality
- Approximately **90%+ of gross margin is fee-based** with long-term contracts — very high revenue quality [S6]
- Long-term acreage dedications: ~170,000 dedicated acres (from Stakeholder acquisition alone) — durable volume profile [S7]
- Counterparty risk: producers concentrated in investment-grade or near-IG E&Ps (Permian Basin majors and large independents)

#### 3. Adversarial Research Sweep

##### Short Seller / Negative Research Reports
- No material short-seller research reports found targeting TRGP specifically during the 2022–2025 period [S8, web search]
- Short interest: Not disclosed in available data; TRGP is not a heavily-shorted name given strong institutional Buy consensus [S6]

##### SEC Investigations / Regulatory Actions
- No SEC enforcement actions, PCAOB notes, or restatement history identified [S1]
- TRGP's 10-K filings show clean auditor opinions (no material weaknesses reported)

##### Litigation Risks
- Midstream companies routinely face environmental litigation and permit challenges; TRGP has no disclosed material pending litigation beyond ordinary-course matters [Judgment, S1]
- The conversion from MLP to C-Corp in 2016 was completed without significant legal challenges

##### ESG / Environmental Concerns
- Targa operates significant methane-emitting infrastructure; released sustainability report (Sep 2025) [S8]
- CCUS activities via Stakeholder acquisition (Jan 2026) position TRGP to generate 45Q tax credits, partially mitigating emissions concerns [S7]
- Flaring reduction is a regulatory and investor priority; TRGP has invested in treating/compression to reduce flaring [Judgment]

##### Governance Concerns
- ISS QualityScore: Overall 8/10; Board: 8; Shareholder Rights: 9; Audit: 4; Compensation: 4 [S6]
- Low Audit and Compensation pillar scores are the main governance flags
- CEO Matthew Meloy received $14.2M total comp in FY 2023, which some ISS screens flag as elevated

**Adversarial Sweep Conclusion:** No material accounting fraud, SEC investigation, or active short thesis identified. Primary risks are operational (commodity exposure, leverage) and strategic (capex execution), not accounting quality.

#### 4. Source Index

| Code | Source | Date Retrieved |
|------|--------|----------------|
| [S1] | SEC EDGAR filing inventory for TRGP | 2026-05-29 |
| [S2] | StockAnalysis.com TRGP financials | 2026-05-29 |
| [S3] | Targa Q4 2024 earnings release | 2026-05-29 |
| [S6] | Management/compensation data (salary.com, SEC proxy) | 2026-05-29 |
| [S7] | Stakeholder Midstream acquisition announcement (GlobeNewswire, Dec 2025) | 2026-05-29 |
| [S8] | Web searches: short reports, litigation, sustainability | 2026-05-29 |

## Deeper Financial Analysis

The fundamental tier ($1.00) adds 8 dimensions not included here:

- Revenue Breakdown — segment revenue, geographic mix, product-line margins
- Financial Trends — QoQ momentum, leading indicators, inflection points
- Balance Sheet — debt structure, dilution risk, working capital dynamics
- Capital Allocation — ROIC, buyback cadence, reinvestment efficiency
- Earnings Analysis — beats/misses, guidance vs actuals, transcript highlights
- Competitive Positioning — market share, pricing power, peer benchmarks
- Industry Context — TAM, sector tailwinds/headwinds, regulatory backdrop

**API endpoint:** GET /api/v1/research/TRGP/fundamental

## Navigation

- Overview: /stocks/TRGP
- Financials (this page): /stocks/TRGP/financials
- Thesis: /stocks/TRGP/thesis
- Investment Memo: /stocks/TRGP/memo
- Coverage universe: /stocks