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On Monday, BMO Capital Markets adjusted its price target on shares of TC Energy (NYSE:TRP:CN) (NYSE: TRP), reducing it from Cdn$73.00 to Cdn$71.00. Despite this change, the firm kept its Market Perform rating for the company's stock. BMO Capital's stance comes after reviewing TC Energy's fourth-quarter earnings for the fiscal year 2024, which included a modest EBITDA shortfall, a slight increase in leverage, and some concerns regarding the Southeast Gateway ISD. According to InvestingPro data, TC Energy maintains a substantial market capitalization of $45.91 billion, with a P/E ratio of 16.61 and a current dividend yield of 3.51%.
The analysis by BMO Capital suggests that the 3% decline in TC Energy's stock price following the earnings report might have been excessive. The firm points to the company's defensive nature, with 97% of its operations being contracted or regulated, as a reassuring factor for investors amidst the current trade war uncertainties that have left the market on unstable ground. BMO Capital believes that TC Energy's high-return project backlog is likely to be well-received by the market. InvestingPro analysis reveals two key strengths: the stock's historically low price volatility and an impressive 53-year streak of consecutive dividend payments. Subscribers can access 6 additional ProTips and comprehensive valuation metrics.
TC Energy's financial performance in the last quarter of fiscal year 2024 has been a topic of interest for investors, especially considering the slight discrepancies noted by BMO Capital. Despite these minor concerns, the investment firm emphasizes the company's solid foundation and potential for positive market reception. The company has demonstrated steady growth with revenue increasing by 3.8% over the last twelve months. Based on InvestingPro's Fair Value analysis, TC Energy appears to be trading near its fair value, with analyst price targets ranging from $38.99 to $51.90.
The maintenance of the Market Perform rating by BMO Capital indicates a neutral outlook on the stock, suggesting that while there may not be significant movement expected in the near term, the firm sees potential stability and steady performance for TC Energy in the long run.
In summary, BMO Capital's revised price target reflects a cautious but steady perspective on TC Energy's future amidst a fluctuating market influenced by broader economic factors. The firm's analysis underscores the importance of the company's contracted and regulated business model, which may provide resilience against ongoing market challenges.
In other recent news, TC Energy has received attention from financial analysts. TD Cowen has initiated a Buy rating on TC Energy shares, highlighting the company's 5% dividend yield and setting a price target of C$73.00. This development follows the company's successful spin-off of its liquids pipeline business, enabling it to focus more effectively on its core segments of natural gas midstream and power infrastructure.
Simultaneously, BMO Capital Markets reaffirmed a Market Perform rating for TC Energy, while modestly increasing the price target to C$70.00 from the previous C$66.00. This adjustment reflects a more optimistic view on the company's growth potential, despite a lower EBITDA growth forecast for 2024-2027. BMO Capital's analyst also noted the improving visibility towards achieving TC Energy's annual net capital expenditure target of C$6-7 billion.
These are recent developments that investors might find relevant as they monitor TC Energy's performance in the evolving energy sector. The new ratings and price targets from TD Cowen and BMO Capital could influence market sentiment and contribute to the company's investment profile.
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