Targa Resources downgraded but with higher price target at Wells Fargo

Targa Resources (TRGP +0.2%) is downgraded to Market Perform from Outperform at Wells Fargo based on valuation, while the firm lifts its target price to $94-$98 from $78-$84.

The raised valuation range reflects a higher five-year distribution CAGR forecast of 18% vs. 15.4% previously, driven primarily by an increased distribution growth outlook at Targa Resources Partners (NGLS +0.3%), although this growth appears reflected in the valuation, the firm says.

In an updated investor presentation, TRGP reiterated its 7%-9% 2014 distribution growth guidance and 25%-plus 2014 dividend growth guidance.

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