RBC lifts TC Energy stock price target to Cdn$74, keeps Outperform

On Tuesday, RBC Capital Markets updated its outlook on TC Energy (NYSE:TRP:CN) (NYSE: TRP), with analyst Robert Kwan increasing the price target to Cdn$74.00 from the previous Cdn$71.00. The firm maintains an Outperform rating on the stock. Currently trading at $45.76 with a market cap of $45.91 billion, TC Energy shows mixed signals according to InvestingPro data. Kwan’s assessment followed TC Energy’s fourth-quarter 2024 results, which indicated weaker-than-expected earnings per share (EPS) guidance for 2025 and a pause in new growth announcements, factors that have recently dampened investor sentiment toward the company.

Despite these challenges, Kwan anticipates that upcoming quarters will bring positive developments for TC Energy. He suggests that these updates will likely enhance the company’s ability to sustain its 5-7% earnings before interest, taxes, depreciation, and amortization (EBITDA) compound annual growth rate (CAGR) beyond 2027 and reduce risks within its business operations. With current EBITDA at $5.98 billion and a remarkable 53-year track record of consecutive dividend payments, the company demonstrates long-term stability. Discover more insights about TC Energy’s financial health and growth potential with InvestingPro, which offers 6 additional key investment tips for this stock.

Kwan highlighted TC Energy’s commitment to its financial strategy, emphasizing the company’s dedication to deleveraging toward its debt/EBITDA target of 4.75 times. Trading at a P/E ratio of 14.69 and maintaining a FAIR overall financial health score according to InvestingPro’s comprehensive analysis, this approach is seen as a key factor in the company’s ability to optimize the difference between the returns it earns and its cost of capital.

The analyst’s comments reflect a positive outlook on TC Energy’s potential to capitalize on opportunities in the gas and electricity sectors. Kwan’s perspective suggests that, despite the near-term pressures, TC Energy’s strategic focus might lead to favorable outcomes for the company and its shareholders in the foreseeable future.

Investors and market watchers will be keeping a close eye on TC Energy as it navigates the upcoming quarters, with the expectation that the company’s strategic initiatives will begin to bear fruit, as outlined by RBC Capital’s latest analysis.

In other recent news, TC Energy has experienced several significant developments. BMO Capital Markets recently adjusted its price target for the company, reducing it from Cdn$73.00 to Cdn$71.00, while maintaining a Market Perform rating. The decision followed TC Energy’s fourth-quarter earnings for the fiscal year 2024, which showed a slight EBITDA shortfall and a minor increase in leverage. Despite these changes, BMO Capital Markets sees potential stability and steady performance for TC Energy in the long run.

On a different note, TD Cowen initiated coverage on TC Energy, assigning a Buy rating to the company’s shares and setting a price target of C$73.00. This follows TC Energy’s recent spin-off of its liquids pipeline business, which has allowed the company to focus more effectively on its core segments of natural gas midstream and power infrastructure. TD Cowen noted the company’s competitive dividend yield of 5.0% as an attractive feature for investors.

Lastly, BMO Capital Markets updated its outlook on TC Energy, increasing the price target to C$70.00 from the previous C$66.00, while reiterating a Market Perform rating. This change reflects a more optimistic view on the company’s growth potential despite a tempered EBITDA growth forecast. The analyst from BMO Capital Markets highlighted the company’s trend of higher project returns and the improving visibility towards achieving TC Energy’s annual net capital expenditure target of C$6-7 billion.

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