TC Energy (TRP) Expects Strong Results, Boosts 2024 Outlook
TC Energy Corporation TRP has announced that it expects comparable EBITDA for 2023 to be 8% higher than last year, surpassing initial expectations, thanks to a strong October and favorable exchange rates. The company also provided a robust outlook for 2024, forecasting comparable EBITDA to grow 5-7% year over year, excluding any potential impacts of its planned asset sale program or the South Bow spinoff.
During its annual Investor Day, TC Energy decorated its significant progress in executing its 2023 priorities, which include project execution, deleveraging and maximizing asset value. The company highlighted its commitment to maintaining a disciplined financial approach, targeting a debt-to-EBITDA ratio of 4.75X by the year-end and maintaining its targeted C$6-C$7 billion annual net capital spending in 2025 and beyond.
Advancing Asset Sales and South Bow Spinoff
TC Energy announced plans to advance an incremental C$3 billion of asset sales in 2024, further streamlining its portfolio and enhancing its financial flexibility. The company also reiterated its plans to spin off its South Bow business into a separate, publicly traded company in the second half of 2024. This spinoff is expected to create two strong, independent companies, each with a clear strategic focus and enhanced growth prospects.
South Bow: A Low-Risk Liquids Transportation and Storage Business
TC Energy emphasized that South Bow is "poised to be a low-risk liquids transportation and storage business" with a strong record of profitability and attractive growth opportunities. The company expects South Bow to generate a significant free cash flow and contribute to overall shareholder value creation.
Conclusion
TC Energy's Investor Day showcased its strong financial performance, unwavering commitment to balance sheet discipline and the compelling benefits of the South Bow spinoff. The company's robust growth outlook, coupled with its disciplined financial approach, positions it well for continued success and long-term value creation for shareholders.
Zacks Rank and Key Picks
Currently, TRP carries a Zacks Rank #3 (Hold).
Investors interested in the energy sector might look at some better-ranked stocks like The Williams Companies WMB, sporting a Zacks Rank #1 (Strong Buy), and Oceaneering International, Inc. OII and Liberty Energy Inc. LBRT, each carrying a Zacks Rank #2 (Buy) at present. You can see the complete list of today’s Zacks #1 Rank stocks here.
The Williams Companies is valued at $44.20 billion. The company currently pays a dividend of $1.79 per share, or 4.93%, on an annual basis.
WMB, the United States-based energy infrastructure company, operates through Transmission & Gulf of Mexico, Northeast G&P, West, and Gas & NGL Marketing Services segments.
Oceaneering International is worth $2.10 billion. In the past year, its shares have risen 41.4%.
The company provides engineered services and products, and robotic solutions to the offshore energy, defense, aerospace, manufacturing and entertainment industries worldwide.
Liberty Energy is valued at $3.30 billion. LBRT currently pays a dividend of 20 cents per share, or 1.02%, on an annual basis.
LBRT is a leading provider of hydraulic fracturing and other auxiliary services to North America onshore exploration and production companies.
Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report
Williams Companies, Inc. (The) (WMB) : Free Stock Analysis Report
Oceaneering International, Inc. (OII) : Free Stock Analysis Report
TC Energy Corporation (TRP) : Free Stock Analysis Report
Liberty Energy Inc. (LBRT) : Free Stock Analysis Report
