Stock Analysis | Targa Resources Outlook - Mixed Technical Signals Amid Fossil Fuel Sector Trends

Market Snapshot

Headline Takeaway: Targa Resources (TRGP) shows technical neutrality and moderate attention from indicators, with bullish signals outnumbering bearish ones 1-to-0.

News Highlights

The oil and gas sector is seeing renewed interest due to global developments:

• Colombia’s E&P investment is expected to rise by 8% in 2025 to $4.68 billion, signaling stronger regional activity that may support upstream players like TRGP.
• India reduced crude edible oil customs duty, potentially benefiting refiners by curbing refined oil imports and lowering domestic prices—good news for midstream and refining operations.
• Global private equity exits in fossil fuels are surging, with deals valued at $18.54 billion in the first half of 2025—suggesting increased liquidity and capital reallocation into the sector.

Analyst Views & Fundamentals

Analysts are cautiously optimistic about TRGP, with a simple average rating of 4.33 and a performance-weighted rating of 3.53. While there is a mix of "Strong Buy", "Buy", and no "Sell" ratings in the last 20 days, the dispersion among analysts is notable:

• Scotiabank's Brandon Bingham (50% historical win rate) recently gave a "Strong Buy", while RBC’s Elvira Scotto (42.9% win rate) and Mizuho’s Gabriel Moreen (25% win rate) both gave "Buy".
• The stock is currently up 0.42% in the short term, aligning with a moderate bullish price trend and neutral market expectations.

Fundamental Factors and Scores

• Net profit attributable to parent company shareholders / Net profit (%) = 90.41% — this factor has a strong internal diagnostic score of 3.
• Cost of sales ratio (%) = 64.54% — scores a 2 in the model, suggesting room for improvement in cost control.
• Inventory turnover ratio = 14.64 — low score of 0, indicating potential inefficiencies in inventory management.
• Net cash flow from operating activities / Total liabilities (%) = 8.71% — score of 1, suggesting limited liquidity relative to obligations.
• Total assets turnover ratio = 38.15% — score of 2, indicating modest asset utilization.

Money-Flow Trends

Big money continues to show cautious interest in Targa Resources. Large and extra-large fund inflows are both positive (inflow ratios at 50.24% and 48.50% respectively), while smaller flows are mixed or negative. The fund-flow score is 7.83 (good), suggesting that institutional money is more confident in the stock compared to retail.

TRGP has a block inflow ratio of 49.55%, indicating moderate institutional buying pressure. However, the overall market trend is negative, with only the "Large" and "Medium" inflow categories showing positive momentum.

Key Technical Signals

The stock is in a state of technical neutrality with moderate attention, as bullish indicators (1) outnumber bearish ones (0). Here's a breakdown of key signals:

• Williams %R Oversold: Scored 7.39 (internal diagnostic score), indicating a strong bullish signal with historical 62.22% win rate.
• Williams %R Overbought: Scored 6.62—a neutral to weak signal, with 58.82% win rate.
• MACD Golden Cross: Scored 6.78, showing a neutral rise with 63.64% win rate in the last 5 days.
• MACD Death Cross: Scored 6.09—another neutral signal, with 58.33% win rate.

Recent Chart Patterns

• 2025-08-19 to 2025-08-20: Oversold conditions appeared twice, suggesting possible bottoming behavior.
• 2025-08-27: A MACD Golden Cross signaled a potential short-term upturn.
• 2025-08-28 and 2025-08-29: Overbought conditions returned, indicating caution in over-optimism.

Conclusion

Targa Resources appears to be in a mixed but cautiously bullish technical environment with strong internal diagnostic scores on some key indicators. While fundamentals show room for improvement, the recent fund flows and sector tailwinds support moderate optimism.

Actionable takeaway: Investors may consider watching for a pull-back after the recent overbought signals and weighing the sector's broader trends before entering long positions.