National Bank Financial on Wednesday reiterated its outperform rating on the shares of TC Energy (TRP.TO, TRP) while raising its price target to C$71.00 from C$70.00 after the pipeline and power company staged its annual investor day presentations.
"With its mega projects in the rearview, visibility on achieving <4.75x leverage has improved, while TRP's North American natural gas pipeline footprint remains uniquely positioned to capture significant value from the rising natural gas and related power demand trends (coal-to-gas, LNG, data centers, onshoring), including 23+ Bcf/d of potential development opportunities. Furthermore, returns on sanctioned projects have increased from after-tax IRRs of ~8.5% (6-8x EBITDA build multiple) in 2020 to ~11.0% (5-7x EBITDA build multiple) in 2024, confirming increased torque to new capital investments going forward. Overall, based on accretion to our long-term estimates from ~$1.5 bln of newly sanctioned growth, and a lower net capex profile driven by efficiencies and optimizations, our target bumps up $1 to $71, and we maintain our Outperform rating ahead of rolling our valuation estimates over into 2026e early in the new year," analyst Patrick Kenny wrote.
(MT Newswires covers equity, commodity and economic research from major banks and research firms in North America, Asia and Europe. Research providers may contact us here: https://www.mtnewswires.com/contact-us)
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