TC Energy Plunges 3.3% Amid Lingering Valuation Dilemma – What’s Next for the Pipeline Giant?

Summary
• TC Energy (TRP) slumps 3.29% to $54.09, breaking below its 52-week low of $43.51
• Intraday range narrows to $53.76–$56.02, signaling heightened volatility
• Analysts debate whether $78.77 fair value narrative still holds amid LNG Canada delays

TC Energy’s sharp intraday decline has ignited a valuation tug-of-war between bulls clinging to long-term LNG growth and bears citing overpriced multiples. With the stock trading near its 200-day moving average and a 24.02 P/E ratio, the market is testing whether its $54.09 price reflects optimism or overcorrection. The Matterhorn pipeline expansion’s failure to stabilize Permian prices and regulatory risks loom large, while options activity hints at a volatile near-term outlook.

Valuation Dilemma Intensifies as Permian Woes Bite
TC Energy’s 3.29% drop stems from a perfect storm of sector-specific and company-specific pressures. The Matterhorn pipeline expansion, which reached 2.0 Bcf/d capacity in late 2025, has failed to alleviate Permian Basin oversupply, keeping prices negative and eroding midstream demand. Compounding this, recent news of a 285,000-gallon crude oil spill in Texas has reignited regulatory scrutiny, with environmental risks now factoring into investor sentiment. Meanwhile, the stock’s 24.02 P/E ratio—well above its 18.9 fair value multiple—has drawn short-sellers, who argue the market has overpriced its LNG Canada project amid delays and rising energy transition costs.

Pipeline Sector Sags as Energy Transfer Trails TRP’s Slide
The pipeline transportation sector is under pressure, with Energy Transfer (ET) mirroring TRP’s bearish momentum. ET’s -1.78% intraday drop reflects broader midstream weakness, as takeaway capacity constraints and negative Permian prices erode earnings visibility. While TC Energy’s LNG Canada project offers a growth edge, its sector peers are struggling with similar regulatory and demand-side headwinds. This synchronized decline suggests macroeconomic factors—rather than TRP-specific risks—are driving the selloff, though TC Energy’s premium valuation amplifies its vulnerability.

Options Playbook: Capitalizing on Volatility and Key Levels
• 200-day MA: $50.81 (below current price)
• 30-day MA: $54.59 (near term resistance)
• RSI: 63.3 (neutral, no overbought/oversold signal)
• MACD: 0.571 (bullish divergence)
• Bollinger Bands: $53.29–$56.42 (current price near lower band)

TRP’s technicals suggest a short-term bounce from support at $53.76, with the 30-day MA at $54.59 acting as a critical reentry level. The 24.02 P/E ratio, though elevated, hints at lingering growth optimism, but the 23.35 dynamic P/E and 4.35% dividend yield offer a mixed picture. With implied volatility spiking to 82.01% for the $50 call, options traders are pricing in a volatile near-term path.

Top Options Picks:
• TRP20260116C50 (Call, $50 strike, Jan 16 expiry):
- IV: 82.01% (high volatility)
- Leverage: 9.53% (moderate)
- Delta: 0.735 (high sensitivity)
- Theta: -0.0866 (rapid time decay)
- Gamma: 0.0405 (responsive to price swings)
- Turnover: 4,520 (liquid)
- Why it stands out: This call offers asymmetric upside if TRP rebounds above $54.59, with high gamma amplifying gains in a volatile environment. A 5% downside scenario (to $51.39) still yields a $1.39 payoff, making it a high-conviction play.

• TRP20260116P55 (Put, $55 strike, Jan 16 expiry):
- IV: 23.09% (reasonable)
- Leverage: 41.77% (high)
- Delta: -0.610 (strong bearish bias)
- Theta: -0.0346 (moderate decay)
- Gamma: 0.1683 (high sensitivity)
- Turnover: 346 (liquid)
- Why it stands out: This put thrives in a 5% downside scenario (to $51.39), delivering a $3.61 payoff. The high leverage and gamma make it ideal for aggressive short-side bets if TRP breaks below $53.76.

Hook: Aggressive bulls may consider TRP20260116C50 into a bounce above $56.00, while bears eye TRP20260116P55 for a breakdown below $53.76.

Backtest TC Energy Stock Performance
The backtest of TRP's performance after a -3% intraday plunge from 2022 to now shows favorable results, with the 3-Day win rate at 53.74%, the 10-Day win rate at 53.21%, and the 30-Day win rate at 57.49%. The maximum return during the backtest period was 2.73%, indicating that TRP has a higher probability of positive returns in the short term following the intraday plunge.

TRP at Crossroads: Defend $53.76 or Face Sector-Driven Slide
TC Energy’s near-term fate hinges on its ability to defend the $53.76 intraday low and retest the 30-day MA at $54.59. A sustained break below $53.29 (lower Bollinger Band) would validate the 24.02 P/E as overpriced, while a rebound above $56.02 (intraday high) could reignite LNG optimism. Sector leader Energy Transfer’s -1.78% slide underscores the fragility of midstream valuations, making regulatory and Permian price developments critical. Investors should monitor the $50 call’s liquidity and the $55 put’s leverage for directional bets, but remain cautious on long-term exposure until LNG Canada’s execution risks are clarified.