Targa Resources reported higher earnings for the third quarter of 2026 than a year earlier, while adjusted EBITDA slipped from the prior quarter as weaker marketing and export margins offset record operating volumes. The midstream company also raised its full-year EBITDA outlook, outlined additional capacity expansions and said it expects to recommend a 20% increase in its annual common dividend for 2027.
Key details
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Earnings increased year over year. Net income attributable to Targa was $658 million, up from $478 million in the third quarter of 2025. Adjusted EBITDA was $1.504 billion, 18% higher than a year earlier.
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Adjusted EBITDA declined sequentially. The third-quarter total was 6% below the second quarter of 2026. Record Permian natural gas inlet volumes and record NGL transportation and fractionation volumes helped results, but were outweighed by lower marketing margins and lower LPG export margins. Targa attributed the weaker marketing margin to fewer optimization opportunities, and the lower export margin to reduced volumes and fees.
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The company raised its 2026 earnings outlook. Targa now expects full-year adjusted EBITDA of at least $6.0 billion. It continues to estimate about $5.0 billion in net growth capital spending for the year.
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Targa is planning further capacity additions. It is ordering long-lead equipment for one additional processing plant in the Permian Midland and two in the Permian Delaware. It is also moving forward with a new NGL fractionation train, Train 14, in Mont Belvieu, Texas.
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Several projects are entering service or start-up. Train 12, a fractionator, and the Bull Run Extension residue pipeline have begun operating. The Copperhead processing plant in the Permian Delaware is in start-up. Targa said all three are ahead of schedule.
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The expansion follows new ExxonMobil agreements. In August, Targa announced 20-year, fee-based agreements with ExxonMobil subsidiaries covering natural gas gathering and processing, as well as downstream services, in the Permian. It also announced three Permian Delaware processing plants—Wrangler, Ranger and Ranger II—to support those agreements.
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Targa plans a higher 2027 dividend, subject to board action. The company expects to recommend an annual common dividend of $6.00 per share for 2027, 20% above the $5.00 annualized rate for 2026. Separately, its declared third-quarter 2026 dividend is $1.25 per share, or $5.00 annualized, a 25% increase from the dividend declared for the year-earlier quarter. About $268 million is scheduled to be paid on November 17 to shareholders of record on October 30.
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The company also repurchased shares. During the quarter, Targa bought back 180,768 shares at a weighted average price of $287.64, for a net cost of $52 million. At quarter-end, $1.187 billion remained available under its share repurchase programs.
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Debt and liquidity at quarter-end: Consolidated debt was $19.8 billion, including $17.9 billion of senior unsecured notes, $860 million under the commercial paper program, $451 million under the receivables securitization facility and $796 million of finance lease liabilities. Consolidated liquidity was approximately $2.9 billion, including $2.6 billion available under the revolving credit facility.
Plain-English implications
Targa’s reported results show stronger earnings than a year ago but a sequential decline tied to weaker margins in parts of its logistics business. The company is pairing a higher earnings outlook with substantial planned growth spending and additional infrastructure projects, while also signaling a larger 2027 dividend recommendation. The proposed 2027 increase is an expectation to recommend to the board, not a dividend declaration.