Abstract
Targa Resources will report quarterly results on February 19, 2026 Pre-Market, with current projections pointing to revenue of $4.76 billion and adjusted EPS of $2.29, while investors look for clarity on margin resilience and the revenue mix between product sales and fee-based services.Market Forecast
Consensus projections for Targa Resources indicate current-quarter revenue of $4.76 billion, representing a 6.47% year-over-year increase, alongside adjusted EPS of $2.29, implying 19.72% year-over-year growth and estimated EBIT of $846.04 million, up 9.04% year-over-year. Forecasted gross profit margin and net margin were not provided in the guidance data, so the focus is on topline and earnings cadence.The main business is anchored by product sales, which in the last quarter accounted for $3.47 billion and will likely continue to drive the majority of revenue while exhibiting sensitivity to price and volume dynamics. The most promising segment is midstream service fees, which delivered $681.30 million last quarter; segment-level year-over-year data was not disclosed, but fee-based contributions are expected to support stability within the consolidated revenue mix.
Last Quarter Review
Targa Resources’ previous quarter delivered revenue of $4.15 billion, a gross profit margin of 39.62%, GAAP net profit attributable to the parent company of $478.00 million, a net profit margin of 11.52%, and adjusted EPS of $2.20, up 26.07% year-over-year.A key highlight was earnings resilience: adjusted EPS exceeded the prior estimate by $0.11 and EBIT reached $836.90 million, surpassing expectations by $39.03 million even as revenue missed consensus by $411.73 million. Within the revenue breakdown, product sales contributed $3.47 billion (83.59% of last quarter’s total) and midstream service fees added $681.30 million (16.41% of last quarter’s total), underscoring the large scale of product-related flows alongside a meaningful fee-based base; segment-level year-over-year growth was not provided.
Current Quarter Outlook
Main Business: Product Sales
Product sales are the core revenue engine, and last quarter’s $3.47 billion contribution underscores their central role in the consolidated results. The expected $4.76 billion for the current quarter suggests stable-to-improving topline momentum, though the sensitivity of product sales to price realizations and volumes remains a key consideration for near-term earnings variability. The 39.62% gross margin reported last quarter provides a useful baseline; however, product-related margins can vary with mix, pricing differentials, logistics costs, and inventory timing effects, all of which can drive fluctuations on a quarter-to-quarter basis.Last quarter’s net profit margin of 11.52% and the quarter-on-quarter net profit change of -23.95% frame the challenge of translating topline strength into steady bottom-line growth when product dynamics soften or when cost inputs and spreads shift quickly. For the current quarter, earnings visibility will depend on the degree to which realized prices, product blend, and transport/fractionation costs align with expectations embedded in the $2.29 adjusted EPS estimate. Investors will also track whether product revenues maintain a constructive trajectory while preserving margin quality, especially as volumes and pricing interact with operational and logistical factors.
Most Promising Business: Midstream Service Fees
Midstream service fees contributed $681.30 million last quarter, accounting for 16.41% of total revenue, and they typically offer better visibility than product-driven streams because fees are less sensitive to rapid price swings. While segment year-over-year growth metrics were not provided, fee-based contributions serve as a ballast to consolidated earnings, particularly when product sales face pricing or spread variability. The stable nature of fee-based contracts and the embedded economics of transport, processing, and related services create consistency that can help support forecasted earnings power around the $846.04 million EBIT estimate for the current quarter.In practical terms, this fee-driven base can mitigate short-term volatility in product margins and help consolidate the path toward the projected 19.72% year-over-year growth in adjusted EPS. Investors will watch for any updates on throughput, service utilization, or pricing mechanics that could incrementally lift or temper fee revenue. The distribution of assets and the reliability of contracts are not discussed here, but operational execution—ensuring uptime, efficient scheduling, and cost discipline—will be closely tied to maintaining the effectiveness of this revenue base within consolidated results.
Key Stock-Price Drivers This Quarter
The most immediate driver will be the company’s delivery relative to the $4.76 billion revenue projection and $2.29 adjusted EPS estimate; variance from these figures can sway the share price as the market calibrates growth expectations and margin trends. EPS sensitivity will likely be influenced by realized margins across product sales and the steadiness of fee-based contributions, as well as any cost elements that move in tandem with throughput activity. If product pricing and volumes align with the topline estimate while cost containment remains effective, the projected 9.04% year-over-year EBIT increase becomes more attainable, supporting earnings quality.Guidance and commentary on margin factors—such as pricing differentials, transport and processing costs, and any observed shifts in the revenue mix between product sales and service fees—will also be significant. In the last quarter, the revenue miss versus estimates did not prevent an earnings beat, which suggests cost control and operational leverage can offset sales variability. The market is likely to parse whether this pattern continues or whether it was a one-off effect. Finally, updates to capital allocation priorities and any timing considerations around operational enhancements or maintenance schedules could influence margin sustainability, even if such elements do not immediately shift headline revenue or EPS figures.
Analyst Opinions
The current balance of institutional commentary is tilted toward a bullish stance, with recent previews indicating supportive views on earnings progression and the fee-based foundation underpinning the topline trajectory. Two notable institutions have reinforced positive outlooks in the current period: Morgan Stanley maintained an Overweight rating and adjusted its price target to $266, while Wolfe Research maintained an Outperform rating and raised its price target to $215. Taken together, these views frame expectations for continued earnings advancement, supported by stable service fee contributions and steady product sales, subject to the usual near-term variability in pricing and cost dynamics.The majority view expects Targa Resources to deliver on its $2.29 adjusted EPS projection while keeping the revenue trend constructive around $4.76 billion. Analysts point to the company’s capacity to sustain earnings momentum through fee-based revenue stability, operational execution, and disciplined cost management, all of which can cushion the effects of quarter-specific fluctuations in product sales. The fact that last quarter’s earnings metrics outperformed consensus despite a revenue shortfall is cited as evidence that controllable levers—such as expense discipline and scheduling efficiency—can preserve profitability when market-facing inputs shift quickly.
Looking ahead to February 19, 2026, the bullish camp emphasizes the convergence of several favorable elements: a midrange revenue outlook with 6.47% year-over-year growth, resilient adjusted EPS growth of 19.72% year-over-year, and a measured 9.04% uplift in EBIT. The focus is less on headline numbers alone and more on how the company’s mix of fee-based revenue and product sales can deliver a sustainable earnings profile even if price or spread dynamics oscillate within typical ranges. Analysts will be attentive to margin commentary in management’s remarks, updates on fee-based utilization and contract mechanics, and any signs of cost normalization that could subtly reinforce the bottom line over the coming quarters.
In summary, the prevailing institutional view is constructive: most analysts expect Targa Resources to meet or modestly exceed current-quarter earnings forecasts, underpinned by fee-based stability and consistent operational execution. The key watchpoints for investors are delivery against the $4.76 billion revenue estimate, confirmation of $2.29 adjusted EPS, and management’s color on how product sales and service fees interact to shape margins in the near term. If reported results align with these expectations and guidance indicates steady conditions for the next quarter, the bullish consensus is likely to remain intact as the market updates its forward estimates.
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