Story updated at 9:55 a.m. to reflect market activity.
Targa Resources Partners fell 0.1% to $60.48 in morning trading.
The firm raised its price target for the company to $62 from $60 despite the downgrade. The downgrade and price target hike are due to a valuation call according to Jefferies analysts.
Separately, TheStreet Ratings team rates TARGA RESOURCES PARTNERS LP as a Buy with a ratings score of A+. TheStreet Ratings Team has this to say about their recommendation:
"We rate TARGA RESOURCES PARTNERS LP (NGLS) a BUY. This is based on the convergence of positive investment measures, which should help this stock outperform the majority of stocks that we rate. The company's strengths can be seen in multiple areas, such as its revenue growth, compelling growth in net income, solid stock price performance, growth in earnings per share and notable return on equity. We feel these strengths outweigh the fact that the company has had generally high debt management risk by most measures that we evaluated."
Highlights from the analysis by TheStreet Ratings Team goes as follows:
- The revenue growth greatly exceeded the industry average of 7.7%. Since the same quarter one year prior, revenues rose by 41.5%. Growth in the company's revenue appears to have helped boost the earnings per share.
- The net income growth from the same quarter one year ago has significantly exceeded that of the S&P 500 and the Oil, Gas & Consumable Fuels industry. The net income increased by 225.1% when compared to the same quarter one year prior, rising from $33.40 million to $108.60 million.
- Looking at where the stock is today compared to one year ago, we find that it is not only higher, but it has also clearly outperformed the rise in the S&P 500 over the same period. Although other factors naturally played a role, the company's strong earnings growth was key. Looking ahead, the stock's rise over the last year has already helped drive it to a level which is relatively expensive compared to the rest of its industry. We feel, however, that the other strengths this company displays justify these higher price levels.
- TARGA RESOURCES PARTNERS LP reported significant earnings per share improvement in the most recent quarter compared to the same quarter a year ago. This company has reported somewhat volatile earnings recently. But, we feel it is poised for EPS growth in the coming year. During the past fiscal year, TARGA RESOURCES PARTNERS LP reported lower earnings of $1.17 versus $1.20 in the prior year. This year, the market expects an improvement in earnings ($1.74 versus $1.17).
- The return on equity has improved slightly when compared to the same quarter one year prior. This can be construed as a modest strength in the organization. In comparison to the other companies in the Oil, Gas & Consumable Fuels industry and the overall market, TARGA RESOURCES PARTNERS LP's return on equity is significantly below that of the industry average and is below that of the S&P 500.
- You can view the full analysis from the report here: NGLS Ratings Report