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Targa Resources, Inc. (TRGP) shares soared 12.3% in the last trading session to close at $46.26. The move was backed by solid volume with far more shares changing hands than in a normal session. This compares to the stock's 10.9% gain over the past four weeks.
Targa Resources extended its rally for the seventh straight day, driven by the announcement that it would join the S&P MidCap 400 as of Jun 9. On Thursday, the S&P Dow Jones Indices informed that the energy infrastructure company will replace recently acquired CoreLogic in the mid-cap index. As it is, the rally in crude prices to a multi-year high of around $70 a barrel has lifted the energy space and contributed to the strength in Targa Resources. Further, an improving macro environment prompted Barclays analyst Christine Cho to raise the price target on the company.
This company is expected to post quarterly earnings of $0.25 per share in its upcoming report, which represents a year-over-year change of +19.1%. Revenues are expected to be $2.9 billion, up 90.7% from the year-ago quarter.
While earnings and revenue growth expectations are important in evaluating the potential strength in a stock, empirical research shows a strong correlation between trends in earnings estimate revisions and near-term stock price movements.
For Targa Resources, Inc., the consensus EPS estimate for the quarter has been revised 42.7% higher over the last 30 days to the current level. And a positive trend in earnings estimate revision usually translates into price appreciation. So, make sure to keep an eye on TRGP going forward to see if this recent jump can turn into more strength down the road.
The stock currently carries a Zacks Rank 1 (Strong Buy). You can see the complete list of today's Zacks Rank #1 (Strong Buy) stocks here >>>>
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