TC Energy reveals C$8.5bn expansion plans—Here’s why Wall Street is watching closely

How Did TC Energy Perform Financially in Q1 2025?

TC Energy Corporation (TSX, NYSE: TRP) reported financial results for the first quarter of 2025, reflecting steady operational performance amid a shifting energy landscape. The company recorded net income attributable to common shares of CAD 978 million, or CAD 0.94 per share, marginally down from CAD 988 million, or CAD 0.95 per share, in Q1 2024.

Comparable earnings—a non-GAAP measure used by the company to assess recurring performance—stood at CAD 983 million, or CAD 0.95 per share, compared to CAD 1.02 per share a year ago. Revenues from continuing operations rose to CAD 3.62 billion from CAD 3.51 billion in the same period last year, even after the spinoff of the liquids pipeline business, which no longer contributes to consolidated earnings.

Comparable EBITDA from continuing operations reached CAD 2.71 billion, an improvement over CAD 2.67 billion in Q1 2024, underpinned by stronger pipeline volume growth, particularly across Canadian and U.S. natural gas assets.

What Were the Key Segment Drivers Behind These Results?

TC Energy reported solid volume increases across all three of its natural gas pipeline regions. In Canada, the NGTL system delivered a record 17.8 Bcf/d in February 2025, contributing to an 8% increase in average daily deliveries to 27.6 Bcf/d. In the United States, average volumes climbed 5% to 31.0 Bcf/d, with the GTN system reaching a record 3.2 Bcf/d. Mexican volumes also grew 6% to 3.1 Bcf/d, bolstered by a single-day high of 4.1 Bcf.

In contrast, the Power and Energy Solutions segment recorded a year-on-year EBITDA decline to CAD 224 million, compared to CAD 320 million in Q1 2024. This was attributed to a scheduled outage at Bruce Power’s Unit 4 under the Major Component Replacement (MCR) program, lower Ontario power prices, and narrower gas storage spreads in Alberta. Nevertheless, Bruce Power maintained an availability of 87%, while the cogeneration fleet delivered 98.6% availability.

What Is the Status of TC Energy’s Ongoing and New Projects?

The company is progressing on a significant capital buildout, targeting approximately CAD 8.5 billion in project completions for 2025. Among the largest initiatives is the Southeast Gateway Pipeline in Mexico, a 715-kilometre, 1.3 Bcf/d system constructed roughly 13% below budget. It has already been physically completed and accepted by CFE, with final rate approval from Mexico’s energy regulator, CNE, expected by end-May 2025.

In the United States, the company sanctioned the USD 0.9 billion Northwoods Project on its ANR system. This initiative will add 0.4 Bcf/d of capacity to serve electricity generation and data centre load growth in the U.S. Midwest. Backed by a 20-year take-or-pay contract, the project is slated for service by late 2029.

On the nuclear side, Bruce Power received final schedule and cost approval for its Unit 5 MCR project. The CAD 1.1 billion refurbishment is scheduled to begin in Q4 2026 and will reinforce Ontario’s clean power base.

How Has the Market Reacted to TC Energy’s Results?

TC Energy stock (NYSE: TRP) declined by approximately 4% following its Q1 2025 results, closing at USD 49.60 on April 25, 2025. The dip was primarily due to earnings falling short of expectations—particularly in the power segment, which experienced a 30% EBITDA decline due to nuclear outages.

However, over a 12-month period, the stock has delivered strong returns. It climbed from USD 36.10 on April 26, 2024, to USD 49.60 by April 25, 2025—a 37.4% increase. The rally reflects market confidence in the company’s pivot to natural gas infrastructure and high-contract utility assets.

What Is the Institutional Sentiment and Ownership Breakdown?

Institutional investors continue to play a dominant role in TC Energy’s shareholder base, collectively holding about 83.99% of outstanding shares. Major institutional stakeholders include Royal Bank of Canada, Capital Research Global Investors, and Vanguard Group Inc.

However, the most recent quarterly data shows a net decline of 35.42 million shares held by institutions—a 3.9% reduction. This decrease signals a cautious stance, likely driven by the recent earnings underperformance and operational volatility in the power segment.

Despite the drawdown, the high level of institutional holding suggests continued confidence in the long-term thesis surrounding TC Energy’s stable, rate-regulated EBITDA, currently at 97% of total earnings.

What Are Analysts Saying About TC Energy?

Analyst sentiment on TC Energy is mixed but largely neutral. Morningstar has assigned a fair value estimate of CAD 53 per share, noting the stock currently trades at a roughly 30% premium. The firm maintains a two-star rating, categorising the stock as modestly overvalued with a narrow economic moat.

Meanwhile, Zacks Investment Research ranks the stock as a Hold (Rank #3), indicating expectations of market-level performance over the near term. Analysts have cited the company’s strong project execution and dividend stability as positives, while cautioning against its recent margin compression and earnings variability in the power business.

Is TC Energy a Buy, Hold or Sell Right Now?

Buy Signals:

TC Energy’s ongoing shift toward natural gas positions it to benefit from projected demand increases of up to 40 Bcf/d across North America by 2035. Its active development pipeline and 2025 planned completions worth CAD 8.5 billion add visibility to future cash flows. Moreover, the company’s dividend, currently CAD 3.40 annually per share, remains fully supported by rate-regulated earnings and offers attractive income for yield-focused investors.

Hold Signals:

The Q1 2025 miss and ongoing power segment weakness present short-term risks that justify a cautious approach. Additionally, with shares trading above Morningstar’s intrinsic valuation estimate, potential near-term upside appears limited barring earnings acceleration.

Sell Signals:

Investors sensitive to rising interest rates may find TC Energy’s capital-intensive model less appealing, especially as borrowing costs rise. Operational risks—such as outages at Bruce Power—also add a layer of unpredictability that could affect quarterly earnings.

What Is the Forward Outlook for TC Energy?

Looking ahead, TC Energy expects comparable EBITDA for FY2025 to remain in the range of CAD 10.7 billion to CAD 10.9 billion. Earnings per share are anticipated to decline year-on-year due to the deconsolidation of its liquids pipeline business and project-related capital turnover.

Capital expenditures are forecast between CAD 5.5 billion and CAD 6.0 billion on a net basis. The company reiterated its commitment to dividend growth in the 3–5% range, supported by an annual capital outlay ceiling and stable cash flow from long-term contracts.

Strategically, the firm is aligning its capital deployment with expected structural demand shifts—such as rising electricity needs in Ontario, accelerated gas-fired capacity in Mexico, and the U.S. data centre boom. Additional project sanctions totalling over CAD 4 billion are in development, and new announcements are expected in H2 2025 and into 2026.

A Stable Utility in Transition

TC Energy’s Q1 2025 results highlight the stability of its natural gas pipeline network and the operational reliability of its core assets, even as its power segment faces transitional challenges. The stock’s upward trajectory over the past year reflects institutional and retail support for the company’s strategic direction.

With its focus now firmly on contracted infrastructure and clean energy development, TC Energy remains a cornerstone in North America’s evolving energy ecosystem. However, with valuation concerns and operational risks still present, the current investment case leans towards a hold—with a watchful eye on regulatory milestones in Mexico, nuclear project execution, and future capital efficiency.