Stock Analysis

TC Energy Corporation Yearly Results Just Came Out: Here's What Analysts Are Forecasting For Next Year

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The annual results for TC Energy Corporation (TSE:TRP) were released last week, making it a good time to revisit its performance. TC Energy missed revenue estimates by 3.4%, with sales of CA$13b, although statutory earnings per share (EPS) of CA$4.28 beat expectations, coming in 2.7% ahead of analyst estimates. Analysts typically update their forecasts at each earnings report, and we can judge from their estimates whether their view of the company has changed or if there are any new concerns to be aware of. We thought readers would find it interesting to see analysts' latest (statutory) post-earnings forecasts for next year.

View our latest analysis for TC Energy

TSX:TRP Past and Future Earnings, February 17th 2020
TSX:TRP Past and Future Earnings, February 17th 2020

After the latest results, the 13 analysts covering TC Energy are now predicting revenues of CA$14.2b in 2020. If met, this would reflect an okay 6.8% improvement in sales compared to the last 12 months. Statutory earnings per share are expected to decrease 3.4% to CA$4.13 in the same period. Yet prior to the latest earnings, analysts had been forecasting revenues of CA$14.3b and earnings per share (EPS) of CA$4.00 in 2020. So the consensus seems to have become somewhat more optimistic on TC Energy's earnings potential following these results.

There's been no major changes to the consensus price target of CA$73.43, suggesting that the improved earnings per share outlook is not enough to have a long-term positive impact on the stock's valuation. Fixating on a single price target can be unwise though, since the consensus target is effectively the average of analyst price targets. As a result, some investors like to look at the range of estimates to see if there are any diverging opinions on the company's valuation. Currently, the most bullish analyst values TC Energy at CA$81.00 per share, while the most bearish prices it at CA$60.00. The narrow spread of estimates could suggest that the business' future is relatively easy to value, or that analysts have a clear view on its prospects.

Further, we can compare these estimates to past performance, and see how TC Energy forecasts compare to the wider market's forecast performance. Next year brings more of the same, according to analysts, with revenue forecast to grow 6.8%, in line with its 6.3% annual growth over the past five years. By contrast, our data suggests that other companies (with analyst coverage) in a similar industry are forecast to see their revenues grow 3.2% per year. So although TC Energy is expected to maintain its revenue growth rate, it's definitely expected to grow faster than the wider market.

The Bottom Line

The most important thing to take away from this is that analysts upgraded their earnings per share estimates, suggesting that there has been a clear increase in optimism towards TC Energy following these results. Happily, there were no major changes to revenue forecasts, with analysts still expecting the business to grow faster than the wider market. The consensus price target held steady at CA$73.43, with the latest estimates not enough to have an impact on analysts' estimated valuations.

Still, the long-term prospects of the business are much more relevant than next year's earnings. We have estimates - from multiple TC Energy analysts - going out to 2024, and you can see them free on our platform here.

You can also view our analysis of TC Energy's balance sheet, and whether we think TC Energy is carrying too much debt, for free on our platform here.

If you spot an error that warrants correction, please contact the editor at This article by Simply Wall St is general in nature. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. Simply Wall St has no position in the stocks mentioned.

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