Companies · TRGP · Oil/Gas Distribution
What does Targa Resources' price assume?
The margin the price assumes
Revenue grows as its record suggests; the operating margin is solved at today's price.
At $291.78 on November 11, 2026, with growth of 15.0% a year, the price assumes an operating margin of 32.9% by year 5.
The price assumes
32.9%
Operating margin by year 5, solved at the price
Its 10-year median
3.7%
Fiscal 2016–2025, adjusted for R&D and leases
Its industry
26.1%
Oil/Gas Distribution, Damodaran Online, January 2026
The price assumes a margin above the company's own median and above its industry's.
The numbers behind the chart
| Fiscal year | Adjusted operating margin |
|---|---|
| 2016 | 1.0% |
| 2017 | −1.4% |
| 2018 | 2.3% |
| 2019 | 2.2% |
| 2020 | −15.7% |
| 2021 | 5.1% |
| 2022 | 8.3% |
| 2023 | 16.4% |
| 2024 | 16.5% |
| 2025 | 19.6% |
- Revenue growth, years 1 to 5
- 15.0% a yearCapped at 15%, the most this neutral starting point allows.SEC filings, revenue to fiscal 2025
- Margin path
- From today's margin to 32.9% by year 5Solved at the price. After that, the margin holds.
The growth the price assumes
At its median margin, no revenue growth between −50% and 100% a year matches today's price.
The assumptions both views share
These are neutral settings, the same for every company. Each view holds them and solves for one driver at today's price.
- Reinvestment
- $0.52 of revenue for each $1 investedThe industry's sales-to-capital ratio: how much new capital growth needs.Damodaran Online, January 2026 industry data, Oil/Gas Distribution
- Cost of capital
- 7.71%The return investors need for the risk: the industry's beta, the market's risk premium, and debt rated Ca2/CC from its median margin, with a stated 5-year debt maturity. Built by the engine from the parts listed under Sources, each with its date.
- After year 10
- Growth at the riskfree rate, foreverNew investment earns its cost of capital and no more, so growth after year 10 adds no value, and the cost of capital moves to a mature company's.
Worth knowing
- Its filings under its current registration cover fewer than eleven years, so growth uses the five-year record alone.
- Its industry's margin today is more than 3 points away from its median over the last 6 years of industry data.
- Its debt is large against its usual earnings: rated Ca2/CC at its median margin.
This is a mechanical starting point with neutral assumptions, not a valuation. The story decides.
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- Price: Qualuation's records, close of November 11, 2026.
- 10-K for the period ended December 31, 2025, filed February 19, 2026 (SEC EDGAR, accession 0001193125-26-059296).
- 10-Q for the period ended June 30, 2026, filed August 6, 2026 (SEC EDGAR, accession 0001193125-26-337729).
- Margin record: SEC filings, fiscal 2016-2025, operating margin adjusted for R&D and leases.
- Industry margin: Damodaran Online, January 2026 industry data, Oil/Gas Distribution, adjusted for R&D and leases.
- Sales to capital: Damodaran Online, January 2026 industry data, Oil/Gas Distribution.
- US 10-year Treasury yield (FRED), October 29, 2026.
- Less the US default spread (Damodaran Online, July 2026).
- Industry beta, Oil/Gas Distribution (Damodaran Online, January 2026).
- Equity risk premium (Damodaran Online, October 2026).
- Debt rated Ca2/CC at its median margin (rating table, Damodaran Online, January 2026).
- The margin the price assumes: solved by the engine at the price on November 12, 2026, with the assumptions above.