TC Energy NYSE: TRP raised its 2026 earnings outlook and outlined plans for a larger capital program, saying demand for natural gas and power has expanded its pipeline of potential projects.
The company reported more than $3 billion in third-quarter comparable EBITDA, up 13% from a year earlier, and comparable earnings of $0.94 per share, up 22%. It now expects 2026 comparable EBITDA of $11.8 billion to $12 billion, an increase of $200 million from its previous guidance range.
For 2027, TC Energy forecast comparable EBITDA of $12.3 billion to $12.5 billion, compared with its earlier outlook of $11.7 billion to $11.9 billion. The company also extended its longer-term outlook through 2031, targeting annual comparable EBITDA growth of 5% to 7% over the five-year period.
Higher Spending Supports Growth Outlook
President and CEO François Poirier said TC Energy is ready to increase annual capital spending above its previous $6 billion to $7 billion range, citing financial capacity, attractive project returns and execution performance.
Chief Financial Officer Sean O’Donnell said the midpoint of the new EBITDA growth outlook assumes approximately $8 billion to $9 billion in annual net capital spending from 2029 through 2031. Spending above $9 billion annually could support growth toward the upper end of the range if more projects are converted from the company’s development pipeline, he said.
TC Energy has $30 billion in sanctioned and pending-approval project spending through 2031 and more than $40 billion in projects at the origination stage. Management said sanctioned and pending projects, together with optimization of existing operations, underpin the low end of the EBITDA growth target.
The company expects to end 2026 with debt-to-EBITDA of 4.55 to 4.6 times, below its long-term target of 4.75 times. It also plans annual common dividend growth of 3% to 5%.
O’Donnell said the current plan can be funded internally, even at the high end, without issuing equity, acquisitions or asset sales. Faster conversion of opportunities could prompt consideration of external funding, he said. TC Energy recently announced the sale of its mature Guadalajara pipeline asset in Mexico.
Midwest Pipeline Projects Add Capacity
Among the projects announced on the call, the $1.8 billion Crossroads project would add 1.4 billion cubic feet per day of capacity connecting Appalachian supply to Midwest demand. The American Midwest Project would modify existing facilities and add compression to enable up to 1 billion cubic feet per day of east-to-west capacity across Northern Border.
The American Midwest Project has an estimated total cost of about $400 million, with TC Energy’s proportionate equity contribution expected to be approximately $100 million, said Tina Faraca, executive vice president and chief operating officer of natural gas pipelines. Both projects are supported by 20-year take-or-pay contracts and are expected to enter service in 2030.
Faraca said Crossroads could be expanded from 1.4 billion cubic feet per day to more than 2 billion with limited additional capital, with further expansion possible through other measures.
In Canada, TC Energy announced an investment in Coastal GasLink Phase 2 in September. The $4.9 billion expansion is expected to nearly double the pipeline’s capacity to approximately 4.5 billion cubic feet per day. TC Energy’s committed equity contribution is up to $250 million, while LNG Canada will lead execution.
Power Pipeline Expands
TC Energy identified more than $15 billion of Canadian power opportunities in commercial discussion, representing almost 4 gigawatts of capacity. Greg Grant, executive vice president and president of power and energy solutions, said more than 80% of those projects are currently expected to begin contributing EBITDA by 2031.
Poirier said the company’s risk preferences have not changed, but customers have become more willing to sign longer-term agreements. He said the projects in the power backlog are structured to earn a return both on and of TC Energy’s capital during the contract period, including agreements as short as 10 years.
Grant said opportunities include a range of technologies and could be either grid-connected or behind the meter. He also said potential announcements by the end of 2026 could represent $500 million to $1 billion in incremental investment.
At Bruce Power, Grant said Unit 4 is now expected to return online by the end of 2027, almost four months ahead of its planned in-service date. Management expects rising Bruce Power free cash flow to unlock an additional $2 billion to $3 billion of annual investment capacity for TC Energy in the early 2030s.
Operating Results and Canadian Negotiations
O’Donnell said U.S. natural gas pipeline comparable EBITDA rose 17% in the third quarter, aided by assets placed into service, commercial settlements and contract sales. Power and Energy Solutions EBITDA increased 35%, with Bruce Power achieving 97% overall availability and benefiting from a full quarter of contributions from Unit 3.
Faraca said AI-enabled capacity management generated approximately $65 million of incremental EBITDA year to date across the company’s U.S. and Canadian pipeline systems. TC Energy is targeting $100 million of annual run-rate EBITDA from AI and innovation in 2026 and an additional $100 million in 2027.
On the NGTL system, Faraca said TC Energy is targeting a new customer settlement by the end of the first quarter of 2027 to support future investment. If an agreement is not reached, the company would consider other routes to advance capacity, including working with the regulator. Poirier said the proposed framework would address capital allocation from 2029 onward.
About TC Energy (NYSE:TRP)
TC Energy NYSE: TRP is a North American energy infrastructure company that develops and operates natural gas and liquids pipelines, natural gas storage facilities, and power-generation assets. Its services help transport and store energy for producers, utilities, businesses, and consumers.
The company’s pipeline network spans Canada, the United States, and Mexico. Its power-generation portfolio includes an interest in Bruce Power, which operates a nuclear generating station in Ontario.
Founded as TransCanada Corporation, the company adopted the TC Energy name in 2019.
This instant news alert was generated by narrative science technology and financial data from MarketBeat in order to provide readers with the fastest reporting and unbiased coverage. Please send any questions or comments about this story to contact@marketbeat.com.
Before you consider TC Energy, you’ll want to hear this.
MarketBeat keeps track of Wall Street’s top-rated and best performing research analysts and the stocks they recommend to their clients on a daily basis. MarketBeat has identified the five stocks that top analysts are quietly whispering to their clients to buy now before the broader market catches on… and TC Energy wasn’t on the list.
While TC Energy currently has a Moderate Buy rating among analysts, top-rated analysts believe these five stocks are better buys.
Discover the next wave of investment opportunities with our repo
Source: www.marketbeat.com — article syndicated from the publisher’s feed; all rights remain with the original publisher.
