Targa Resources (TRGP) will likely report solid H2 results backed by Permian volume strength, while the company has a long runway for Permian growth, RBC Capital Markets said in a note.

The company is expected to benefit from previously curtailed Waha-related volumes returning as additional egress capacity comes online. The investment fiirm said in a Tuesday note that it also expects natural gas marketing benefits to normalize compared with the first half, which benefited from Waha/Henry Hub price dislocations.

RBC said it updated its estimates for Targa after a quarterly catchup call and mark to market commodity prices for Q3, and now expects Q3 adjusted EBITDA of $1.466 billion, slightly down from the previous estimate of $1.475 billion and "relatively in line" with the FactSet consensus estimate.

Meanwhile, Targa will also likely "benefit substantially from long-term Permian production growth supplemented by the previously announced 20-year agreements" with ExxonMobil (XOM), the note said.

The investment firm said it expects Targa to report Q3 results in the first week of November.

RBC reiterated Targa's outperform rating and $338 price target.

Targa shares were down 1.7% in Wednesday trading.

Price: 280.76, Change: -4.96, Percent Change: -1.74