Why Wall Street Analysts Are Bullish on TransCanada



Year-to-date performance

TransCanada (TRP) has risen nearly 10.0% so far in 2017. It has outperformed Targa Resources (TRGP), ONEOK (OKE), and Enbridge (ENB), which have fallen 26.0%, 13.0%, and 16.0%, respectively, over the same timeframe. 

The Energy Select Sector SPDR ETF (XLE) has fallen nearly 12.0% year-to-date. Lower energy commodity prices have severely impacted the performance of energy companies over the last three years. The SPDR S&P 500 ETF (SPY) (SPX-INDEX) has risen nearly 14.0% year-to-date.

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Analyst recommendations

As the chart above shows, Wall Street analysts are bullish on TransCanada. TRP’s mean price target rose steadily from $68.92 Canadian in November 2016 to its current level of $72.17 Canadian.

Of the analysts surveyed by Reuters, 87.0% rated TransCanada as a “buy,” and 13.0% rated it as a “hold.” None of the surveyed analysts rated TRP as a “sell.” TRP’s mean target price implies a 14.0% upside in a year from its current price of $63.55 Canadian.

Recommendations for peers

As for TransCanada’s peers, 25.0% of analysts rated ONEOK as a “buy,” 56.0% rated Enbridge as a “buy,” and 58.0% rated Targa Resources as a “buy.”

Pipeline projects in the United States have faced widespread protests from environmental and aboriginal groups in recent years. You can learn more about these pipeline projects in Controversy in the Pipeline: The Top 5 Hot-Button Projects.


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