FYI: Comments from TPH re price target 09:55 AM EDT, 10/18/2022 (MT Newswires) -- Tudor, Pickering, Holt on Tuesday raised its rating on the shares of TC Energy (TRP.TO,TRP) to buy from hold while trimming its price target to C$65.00 from C$68.00 as the pipeline and power company's stock price has weakened since it issued shares in August.
"TC Energy has significantly underperformed peers and the broader market since announcing an equity offering in Aug'22 (-11% vs AMNA; -8% vs TSX; -5% vs ENB CN)," analyst Matthew Taylor noted. "At deal announcement, we saw the merits of the CFE partnership but advised investors to wait to step in with the stock trading at C$65.63/sh and a looming equity overhang from a strained balance sheet. Since then, the stock has fallen 13% and valuation has de-rated by ~1.0x on 2023e EV/EBITDA making the risk/reward proposition more attractive with several notable developments poised to push Street numbers higher: 1) USD/CAD foreign exchange - Q3 and Q4 are 4% and 10%, respectively, above the 1.25 rate included in guidance with current strip showing FY'23 10% higher, 2) Bruce Power availability - Q3 public data shows ~96% (we previously published an erroneous number of 81%), which is well above the "low 80's" guidance, and 3) The Brent-WTI differential widened by ~35% in Q3 to $4.54/bbl with strip showing it averaging a similar level through 2023 - we see this as incrementally positive for Liquids marketing margins. We no longer see the previously disclosed 2022 guidance as relevant and currently sit ~2% above the Street on Q3 Comparable EBITDA and 2% on FY'22, with a more notable variance of 3% in FY'23 on total EBITDA of C$10.6B. On EPS we sit above the Street at 5%, 4%, and 1%, respectively. The positive earnings momentum has TRP screening near the top of the pack compared to NAm peers when looking at 3-year EBITDA CAGRs through 2024 (TRP of 4.9% vs peers of 3.5%)."
(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)
Price: 58.01, Change: +0.98, Percent Change: +1.72