TC Energy Earnings: Solid Results, With Liquids Spinoff a Likely Second-Half Catalyst

TC Energy’s first-quarter results were decent, and we expect to maintain our CAD 63 and USD 47 fair value estimates, as well as our narrow moat rating. While 2024 EBITDA guidance was CAD 11.2 billion to CAD 11.5 billion, we believe that volumes and segment-level earnings still point to upside and our estimate of CAD 11.8 billion. Comparable EBITDA was up 11% year over year to CAD 3.1 billion. Asset sales remain on track to meet the firm’s CAD 3 billion target, with over CAD 1.1 billion in proceeds secured thus far. Management remains confident in achieving its adjusted 4.75 debt/EBITDA target by the end of 2024. Capital spending is also reaffirmed at a midpoint of CAD 8.25 billion, matching our view.