Is Targa Resources Corp. overvalued or undervalued?

As of 1 May 2025, Targa Resources Corp. has moved from an expensive to a very expensive valuation grade. The company is currently overvalued, with a P/E ratio of 19, which is higher than its peer Cheniere Energy Partners LP, which has a P/E of 16.13. Additionally, Targa's EV to EBITDA stands at 11.66, compared to Cheniere's 11.40, further indicating a premium valuation. The PEG ratio of 0.35 suggests that while the company may have growth potential, its current price does not reflect a favorable valuation relative to its earnings growth.
In comparison to its peers, Targa Resources Corp. exhibits significantly higher valuation metrics, which reinforces the conclusion of overvaluation. The company's return over the past year has been strong at 31.68%, outpacing the S&P 500's return of 10.26%, but this performance does not justify its current very expensive valuation status. Overall, the combination of high valuation ratios and peer comparisons suggests that Targa Resources Corp. is not a compelling investment at its current price level.