TC Energy’s Soaring Momentum: Why the $75 Price Target Makes Sense

TC Energy (NYSE: TRP) has caught the attention of analysts after National Bank of Canada raised its price target to $75 from $74, citing strong execution of strategic projects and resilient financial metrics. This move reflects growing investor confidence in the Canadian energy infrastructure giant’s ability to capitalize on North America’s energy transition. Let’s dive into the data behind this bullish call.

A Foundation of Operational Excellence

TC Energy’s first-quarter 2025 results underscore its operational resilience. Comparable EBITDA remained stable at $2.7 billion, while capital expenditures are projected to stay within the $5.5–$6.0 billion range for 2025—a disciplined approach that keeps leverage reduction on track.

The company’s Natural Gas Pipelines segment delivered record volumes across Canada, the U.S., and Mexico. Canadian deliveries hit 27.6 Bcf/d (up 8% year-over-year), while Mexico’s flows surged to a record 4.1 Bcf/d in March. These metrics are vital because 97% of TC Energy’s EBITDA comes from rate-regulated or long-term contracted assets, shielding it from commodity price volatility.

Project Milestones Fueling Future Growth

The Southeast Gateway Pipeline stands out as a cornerstone of TC Energy’s growth strategy. Completed 13% under budget and ready for service, this 1.3 Bcf/d pipeline is fully contracted with Mexico’s state-owned utility CFE. While awaiting final regulatory approval from Mexico’s CNE (expected by late May), the project is poised to supply 10 of 14 planned natural gas power plants in Mexico by 2030, directly boosting EBITDA.

Another critical project is the Northwoods expansion on the ANR system. This $900 million initiative will add 0.4 Bcf/d capacity to serve U.S. Midwest power generation and data centers. With a 20-year take-or-pay contract and a targeted 5–7x build multiple (capital expenditures vs. EBITDA), it exemplifies TC Energy’s focus on low-risk, high-return ventures.

Nuclear Power: A Long-Term Growth Lever

The Bruce Power Unit 5 Major Component Replacement (MCR) program is another strategic win. Approved at $1.1 billion, this project will extend Unit 5’s operational life by over 35 years, backed by a contract to 2064. Combined with ongoing MCRs at Units 3 and 4, these investments ensure TC Energy remains a cornerstone of Ontario’s low-emission electricity grid, which faces a 75% demand growth projection by 2050.

Dividend Stability Amid Earnings Adjustments

While comparable EPS dipped to $0.95 in Q1 2025 from $1.02 in 2024 due to planned outages at Bruce Power, TC Energy maintained its $0.85 quarterly dividend—a 25-year streak of growth. The company’s dividend is supported by a 3–5% annual growth target, achievable through its $8.5 billion 2025 project pipeline, which includes cost-efficient projects tracking 15% below initial budgets.

Risks on the Horizon

• Regulatory Delays: Southeast Gateway’s in-service date hinges on CNE approval, though TC Energy has contractual safeguards to mitigate financial impacts.
• Leverage: While debt-to-EBITDA remains above the 4.75x target, the company’s $10.7–$10.9 billion 2025 EBITDA guidance and disciplined capital spending aim to reduce this ratio over time.

Conclusion: A Bullish Case for $75 and Beyond

National Bank’s $75 price target isn’t arbitrary. TC Energy’s execution of high-margin, contracted projects like Southeast Gateway and its nuclear MCRs positions it to deliver 5–7% CAGR EBITDA growth through 2027. With 97% of EBITDA shielded from commodity risk, a 3–5% dividend growth trajectory, and a $4 billion+ pipeline of sanctioned projects, the stock is well-positioned to outperform peers.

Analysts at National Bank highlight that TC Energy’s $44 billion market cap already reflects much of this optimism, but catalysts like Southeast Gateway’s in-service and FERC rate case resolutions could push shares higher. For income-focused investors, the 3.8% dividend yield offers stability, while growth investors can look to projects like the Northwoods expansion, which could add $300–$500 million in annual EBITDA by 2030.

In short, TC Energy isn’t just keeping up with the energy transition—it’s leading it. The $75 target isn’t a stretch; it’s a reflection of a company engineered for resilience and growth.