TimesSquare Capital Management recently highlighted Targa Resources (TRGP) in its Q1 2026 investor letter after the stock reacted to geopolitical tensions in Iran, increased planned capital spending, and new natural gas liquids infrastructure projects.

Targa Resources shares have had a choppy few weeks, with the stock down 5.0% over the last 7 days and 3.2% over 30 days. That sits against a much stronger backdrop, including a 38.6% year to date share price return and a 1 year total shareholder return of 52.6%. This suggests the recent pullback comes after a multi year period where total shareholder return over 5 years has been more than 5x.

If you are thinking beyond Targa Resources and want to see what else is moving in energy infrastructure, it could be a good time to scan 35 power grid technology and infrastructure stocks

With Targa Resources now sitting on a 5 year total shareholder return of more than 5x and trading at $258.88, the key question is whether recent weakness leaves the stock undervalued or if the market is already pricing in future growth.

Most Popular Narrative: 9.3% Undervalued

The most followed narrative on Targa Resources pegs fair value at about $285 per share, a touch above the recent $258.88 close and framing the current pullback against a fuller long term earnings story.

Substantial investment in integrated export infrastructure, including the expansion and debottlenecking of LPG export facilities and new fractionation trains, directly leverages rising international and petrochemical-sector demand for U.S. NGLs, creating long-term opportunities to enhance utilization and operating leverage, which should support higher earnings and margins.

Want to see what sits behind that confidence in Targa Resources? The narrative leans on compound revenue growth, firm margins and a future earnings base that assumes meaningful operating leverage. Curious which specific cash flow and valuation hurdles have to be cleared for that fair value to stack up?

Result: Fair Value of $285.33 (UNDERVALUED)

However, the Targa Resources narrative also leans on continued Permian volume strength and new export capacity, so overbuild risks or tighter fees could quickly challenge that 9.3% undervalued view.

Another View: Multiples Point To A Richer Price For Targa Resources

The narrative around Targa Resources leans on a fair value of about $285, yet the current P/E of 26.2x sits well above the US Oil and Gas industry at 13x, the peer average at 15.9x, and even the fair ratio of 23.7x. That gap hints at valuation risk if sentiment cools.

For investors weighing that trade off against the long term growth story, it can help to see how the valuation breaks down line by line, not just at the headline multiple level, which is where See what the numbers say about this price — find out in our valuation breakdown.

Next Steps

If this mix of optimism and concern around Targa Resources feels familiar, do not wait around. Review the data, weigh the trade offs and check the 3 key rewards and 3 important warning signs.

Looking for more investment ideas beyond Targa Resources?

Do not stop with Targa Resources, especially when a few extra minutes with a focused screener can help you identify additional opportunities.

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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.