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What Will Drive TC PipeLines’ Growth in 2017?

PART:
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Part 2
What Will Drive TC PipeLines’ Growth in 2017? PART 2 OF 8

What Do Analysts Recommend for TC PipeLines?

Analysts’ recommendations

Of the analysts surveyed by Reuters, 30% rated TC PipeLines (TCP) as a “buy,” 50% rated it as a “hold,” and 20% rated it as a “sell.” Currently, the stock is trading at $58.1. It’s close to the average target price of $58.2 recommended by the analysts.

What Do Analysts Recommend for TC PipeLines?

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The above graph shows analysts’ recommendations for TC PipeLines stock. TC PipeLines forms ~2% of the Alerian MLP ETF (AMLP).

As for its peers, 44% of the analysts rated Enbridge Energy Partners (EEP) a “buy,” 56% rated Western Gas Partners (WES) a “buy,” and 67% rated Tallgrass Energy Partners (TEP) a “buy.”

Strong earnings

TC PipeLines recorded an 18% rise in its net income from wholly owned subsidiaries for nine months ending September 30, 2016—compared to the same period in 2015.

In January 2016, TC PipeLines acquired 49.9% interest in the PNGTS natural gas pipeline from a subsidiary of TransCanada (TRP) for $228 million. TC PipeLines’ financial performance continues to benefit from its PNGTS acquisition and other recent acquisitions.

Brandon Anderson, president of TC PipeLines, said during the 3Q16 earnings release, “Our diverse portfolio of pipeline assets continued to deliver strong financial results this quarter, generating increased earnings and cash flow compared to the same quarter in 2015.”

He added, “Our results reflect the addition of PNGTS to our partnership along with solid results from both GTN and Great Lakes during the quarter. GTN continued to benefit from increased demand for its short-term transportation services and contracting on Great Lakes has improved year-over-year.”

In the next part, we’ll analyze TC PipeLines’ leverage situation.

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