Markham, Ontario, Canada – Investors in TC Energy Corporation are keeping a watchful eye on recent developments as the company navigates through a challenging period. While the company has shown promising results with a massive Q4 beat and a 3% dividend increase, there are concerns about its performance compared to other midstream companies in Canada. Despite these challenges, analysts maintain a “hold” rating on the company’s shares.
As TRP’s stock dipped, investors took the opportunity to create fresh positions in the company, highlighting a potential shift in confidence. The latest results for Q1-2024 were met with anticipation as TRP’s adjusted EBITDA exceeded expectations, showcasing a 3.5% beat and strong performance across all asset segments, particularly in Natural Gas.
Concerns over cost overruns in the energy sector continue to linger, with TRP emphasizing the importance of on-time and on-budget execution in light of its deleveraging efforts. The company’s maintained adjusted EBITDA guidance for the year suggests a conservative approach as TRP aims to let its financials speak for themselves.
Looking ahead, TRP’s strategy to achieve its 4.75 times debt-to-EBITDA target involves asset sales, with an agreement already in place to sell PNGTS for expected pre-tax proceeds of approximately $1.1 billion. These divestitures, coupled with a planned liquids pipeline spinoff, are expected to strengthen TRP’s balance sheet and position the company for future growth.
Despite TRP’s debt levels, investors remain cautious in adding to positions beyond a certain threshold, opting for covered calls as a strategy to mitigate risk and potentially increase yields. By setting offers to own TRP at or below $35.00, investors aim to capitalize on opportunities while awaiting advantageous price points. The outlook for TRP remains stable, with analysts suggesting a hold rating for the time being.
It is essential for investors to conduct their own due diligence and seek professional advice before making any financial decisions, especially when dealing with securities that do not trade on major U.S. exchanges. Maintaining a strategic approach and staying informed are crucial in navigating the complexities of the market.
