Gold prices steady ahead of Fed decision; weekly weakness noted
On Friday, CIBC (TSX:CM) analysts upgraded TC Energy (NYSE:TRP) stock, moving its rating from Neutral to Outperformer and increasing the price target to Cdn$76.00, up from the previous Cdn$71.00. The upgrade follows TC Energy’s recent quarterly financial report, which was deemed to align with expectations. The stock has shown remarkable strength, delivering a 59.8% return over the past year and currently trading near its 52-week high of $51.25. According to InvestingPro data, the company maintains a "GOOD" overall financial health score, with particularly strong marks in profit and price momentum metrics.
TC Energy has been recognized for its consistent execution on current projects, particularly the Strategic Gas Pipeline (SGP), which is approaching its in-service date. The company’s ability to deliver these projects under budget has been a notable factor in the improved outlook from CIBC. With a market capitalization of $52.36 billion and an impressive track record of maintaining dividend payments for 53 consecutive years, currently offering a 4.76% yield, TC Energy has established itself as a reliable income-generating investment.
The analysts at CIBC highlighted the company’s potential for sustained growth momentum. They also pointed out that the risks associated with TC Energy are diminishing as the SGP nears completion, which is a positive sign for the company’s future performance.
The price target increase to Cdn$76.00 is based on a discounted cash flow (DCF) analysis. This method of valuation is used to estimate the value of an investment based on its expected future cash flows, adjusted for the time value of money. InvestingPro analysis reveals the stock trades at a P/E ratio of 15.69, suggesting reasonable valuation levels relative to its growth potential. For deeper insights into TC Energy’s valuation and growth prospects, investors can access the comprehensive Pro Research Report, available exclusively on InvestingPro.
In their commentary, CIBC analysts stated, "TC Energy reported a largely in-line quarter; however, we believe the main takeaway is that growth momentum is likely to continue, while at the same time risk is declining as the SGP in-service date nears. The company continues to execute well on its existing projects, such as SGP, and is doing so under budget. We are upgrading our rating to Outperformer from Neutral while our discounted cash flow (DCF) based price target increases to $76 from $71." This statement underscores the analysts’ confidence in the company’s ability to maintain its growth trajectory and manage risks effectively.
In other recent news, TC Energy Corporation has been the focus of multiple analyst reports following its fourth-quarter 2024 earnings. RBC Capital Markets raised its price target for TC Energy to Cdn$74.00, maintaining an Outperform rating, despite the company’s weaker-than-expected earnings per share guidance for 2025. RBC’s analyst, Robert Kwan, remains optimistic about TC Energy’s strategic focus, anticipating positive developments in the upcoming quarters. Meanwhile, BMO Capital Markets adjusted its price target downward to Cdn$71.00, keeping a Market Perform rating due to a modest EBITDA shortfall and increased leverage. BMO highlights TC Energy’s defensive nature, with 97% of operations being contracted or regulated, as a stabilizing factor amid market uncertainties. Additionally, Citi analysts initiated coverage with a Neutral rating and a C$75.00 price target, citing TC Energy’s strong position in the natural gas and power sectors. However, Citi expressed concerns over the company’s high leverage and premium stock valuation relative to peers. These analyses reflect a mixed outlook, with varying degrees of confidence in TC Energy’s future performance.
This article was generated with the support of AI and reviewed by an editor. For more information see our T&C.