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This article explores whether TC Energy is offering fair value today or if the current price is leaving something on the table for new investors. It walks through what the market is pricing in and what that might mean for you.
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TC Energy’s share price sits at C$75.48, with returns of 1.8% over 7 days, 2.2% over 30 days, a 1.8% decline year to date, and gains of 19.2% over 1 year, 71.8% over 3 years and 95.0% over 5 years that many investors will be thinking about as they weigh up value today.
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Recent headlines around TC Energy have kept the company on investors’ radar, particularly as broader discussions about energy infrastructure, regulation and capital allocation continue to shape expectations. These developments give useful context for understanding why the share price and sentiment sit where they do right now.
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On our framework TC Energy currently scores 1 out of 6 on the valuation checks. You can see this in more detail through this 1 out of 6 valuation score. Next we will walk through the main valuation approaches behind that score, before finishing with a way to think about value that goes beyond the usual multiples and models.
TC Energy scores just 1/6 on our valuation checks. See what other red flags we found in the full valuation breakdown.
A Discounted Cash Flow, or DCF, model looks at the cash TC Energy is expected to generate in the future and then discounts those amounts back to today using a required rate of return. The aim is to estimate what the business could be worth per share based on those projected cash flows.
For TC Energy, the model used is a 2 Stage Free Cash Flow to Equity approach, with cash flows measured in CA$. The latest twelve month free cash flow is about CA$401.7 million. Analysts provide explicit estimates for several years, and Simply Wall St then extends those projections, with free cash flow for 2030 estimated at CA$2.876 billion and further figures extrapolated out to 2035.
Putting all of those discounted cash flows together gives an estimated intrinsic value of CA$52.88 per share. Against the current share price of CA$75.48, the DCF output suggests TC Energy is around 42.7% overvalued on this model.
Result: OVERVALUED
Our Discounted Cash Flow (DCF) analysis suggests TC Energy may be overvalued by 42.7%. Discover 868 undervalued stocks or create your own screener to find better value opportunities.
