Targa Resources Sees Unusually Large Options Volume (NYSE:TRGP)

Key Points

• Unusually high bearish options activity: Traders purchased 4,358 put options on Targa Resources, about 521% above its average daily put volume.
• Strong earnings but mixed revenue: Targa reported quarterly EPS of $3.54, beating estimates of $2.83, while revenue of $4.44 billion fell short of the $4.90 billion consensus forecast.
• Analysts remain bullish: The stock has a consensus “Buy” rating and an average price target of $317.24, despite recent insider selling and shares trading near $277.74.

Targa Resources, Inc. (NYSE:TRGP - Get Free Report) was the target of unusually large options trading activity on Monday. Traders bought 4,358 put options on the company. This is an increase of approximately 521% compared to the average daily volume of 702 put options.

Targa Resources Stock Performance

NYSE:TRGP traded down $0.10 during mid-day trading on Monday, hitting $277.74. 304,237 shares of the company traded hands, compared to its average volume of 1,307,834. The company has a quick ratio of 0.68, a current ratio of 0.77 and a debt-to-equity ratio of 5.01. The stock's fifty day moving average price is $282.12 and its 200-day moving average price is $265.60. The firm has a market cap of $59.55 billion, a price-to-earnings ratio of 26.54, a price-to-earnings-growth ratio of 1.31 and a beta of 0.72. Targa Resources has a one year low of $144.14 and a one year high of $307.94.

Targa Resources (NYSE:TRGP - Get Free Report) last posted its quarterly earnings data on Thursday, August 6th. The pipeline company reported $3.54 EPS for the quarter, topping the consensus estimate of $2.83 by $0.71. Targa Resources had a return on equity of 69.26% and a net margin of 13.55%.The firm had revenue of $4.44 billion for the quarter, compared to the consensus estimate of $4.90 billion. Research analysts anticipate that Targa Resources will post 11.32 earnings per share for the current fiscal year.

Targa Resources Announces Dividend

The company also recently declared a quarterly dividend, which was paid on Friday, August 14th. Shareholders of record on Friday, July 31st were issued a dividend of $1.25 per share. The ex-dividend date of this dividend was Friday, July 31st. This represents a $5.00 annualized dividend and a yield of 1.8%. Targa Resources's payout ratio is currently 47.80%.

Insiders Place Their Bets

In other news, Director Paul W. Chung sold 1,816 shares of the firm's stock in a transaction on Tuesday, September 1st. The stock was sold at an average price of $296.11, for a total value of $537,735.76. Following the transaction, the director directly owned 44,000 shares in the company, valued at $13,028,840. This trade represents a 3.96% decrease in their position. The transaction was disclosed in a filing with the SEC, which is available at this link. Also, Director Charles R. Crisp sold 3,000 shares of Targa Resources stock in a transaction on Tuesday, August 25th. The stock was sold at an average price of $290.23, for a total value of $870,690.00. Following the completion of the sale, the director directly owned 62,292 shares of the company's stock, valued at $18,079,007.16. The trade was a 4.59% decrease in their position. The disclosure for this sale is available in the SEC filing. In the last quarter, insiders sold 7,216 shares of company stock valued at $2,127,634. Company insiders own 1.37% of the company's stock.

Institutional Trading of Targa Resources

A number of hedge funds and other institutional investors have recently modified their holdings of the company. QRG Capital Management Inc. raised its position in shares of Targa Resources by 13.3% during the 2nd quarter. QRG Capital Management Inc. now owns 19,848 shares of the pipeline company's stock valued at $5,322,000 after purchasing an additional 2,325 shares during the period. Envestnet Portfolio Solutions Inc. boosted its holdings in Targa Resources by 9.9% in the 2nd quarter. Envestnet Portfolio Solutions Inc. now owns 1,870 shares of the pipeline company's stock worth $501,000 after buying an additional 168 shares during the period. Envestnet Asset Management Inc. boosted its holdings in Targa Resources by 5.8% in the 2nd quarter. Envestnet Asset Management Inc. now owns 756,768 shares of the pipeline company's stock worth $202,920,000 after buying an additional 41,241 shares during the period. State Street Corp increased its stake in Targa Resources by 4.6% in the 2nd quarter. State Street Corp now owns 14,226,166 shares of the pipeline company's stock worth $3,814,604,000 after buying an additional 626,885 shares in the last quarter. Finally, The Manufacturers Life Insurance Company increased its stake in Targa Resources by 24.7% in the 2nd quarter. The Manufacturers Life Insurance Company now owns 374,589 shares of the pipeline company's stock worth $100,442,000 after buying an additional 74,241 shares in the last quarter. 92.13% of the stock is owned by hedge funds and other institutional investors.

Analyst Ratings Changes

TRGP has been the topic of a number of recent research reports. Stifel Nicolaus started coverage on Targa Resources in a report on Thursday, September 10th. They issued a "buy" rating and a $340.00 target price on the stock. TD Cowen upgraded Targa Resources from a "hold" rating to a "buy" rating and boosted their price target for the company from $275.00 to $350.00 in a research note on Friday, September 18th. JPMorgan Chase & Co. upped their price target on shares of Targa Resources from $291.00 to $315.00 and gave the company an "overweight" rating in a research report on Thursday, July 9th. UBS Group reiterated a "buy" rating and issued a $318.00 price objective on shares of Targa Resources in a research note on Thursday, July 9th. Finally, Jefferies Financial Group raised their price objective on shares of Targa Resources from $324.00 to $345.00 and gave the stock a "buy" rating in a report on Tuesday, August 18th. One research analyst has rated the stock with a Strong Buy rating and eighteen have assigned a Buy rating to the stock. According to data from MarketBeat, the company has a consensus rating of "Buy" and a consensus price target of $317.24.

Targa Resources Company Profile

Targa Resources Corp. NYSE: TRGP is a midstream energy infrastructure company that gathers, processes, transports and fractionates natural gas and natural gas liquids (NGLs). Its operations connect producers with downstream markets and include natural gas gathering and processing, NGL fractionation, storage, transportation and marketing, as well as crude oil gathering and logistics.

The company operates an integrated network of pipelines, processing plants, fractionation facilities, storage assets and export infrastructure across the United States.

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