Is TC Energy Still Attractive After Recent 15.6% Surge and Pipeline Spin-Off News?

If you are holding TC Energy stock or considering jumping in, you are not alone in wondering where the story goes from here. After all, the past year has seen TC Energy defy the odds with a 15.6% gain, and it is up a remarkable 95.6% over the last five years. Even though the past month saw the share price slip by 0.5% and a small 2.5% dip in the last week, the year-to-date picture remains solidly positive at 5.7%. For a company navigating market shifts in North American energy infrastructure, these are numbers that turn heads. This suggests confidence may be building around its long-term plans, even as short-term traders react to news and industry sentiment.

When it comes to valuation, things get interesting. TC Energy is currently undervalued in only 1 out of 6 traditional checks, giving it a value score of 1. That means a quick glance might not scream bargain. However, it also means there could be misunderstood potential, especially if recent industry developments are not fully appreciated in these metrics. In the next section, we will break down the major valuation approaches, including revenue multiples, cash flow analysis and asset-based measures, to see how TC Energy really stacks up. If you want an even sharper edge, stay tuned, because the last method we will discuss could provide the clearest signal of all.

TC Energy scores just 1/6 on our valuation checks. See what other red flags we found in the full valuation breakdown.

Approach 1: TC Energy Discounted Cash Flow (DCF) Analysis

The Discounted Cash Flow (DCF) model is a fundamental valuation method that estimates the value of a company by projecting its future cash flows and discounting them back to today's value. By looking ahead at the money TC Energy is expected to generate, the DCF gives a calculated “fair value” based on actual performance and reasonable growth expectations.

For TC Energy, the most recent reported Free Cash Flow (FCF) stands at CA$380.85 Million. Analysts provide explicit forecasts for the next five years, all showing total cash flows well over CA$1 Billion annually. The projections, including estimates and model extrapolations, suggest FCF could reach as high as CA$2.04 Billion by 2029. By 2035, estimates continue around this level, with a forecast of CA$1.61 Billion in free cash flows.

The DCF model employed here uses a two-stage Free Cash Flow to Equity approach. Simply Wall St calculates a resulting intrinsic value for TC Energy of CA$31.84 per share. That figure is about 126.4% above the current share price, meaning the stock screens as significantly overvalued based on discounted cash flows.

Story Continues

Result: OVERVALUED

Head to the Valuation section of our Company Report for more details on how we arrive at this Fair Value for TC Energy.TRP Discounted Cash Flow as at Oct 2025

Our Discounted Cash Flow (DCF) analysis suggests TC Energy may be overvalued by 126.4%. Find undervalued stocks or create your own screener to find better value opportunities.

Approach 2: TC Energy Price vs Earnings

The Price-to-Earnings (PE) ratio is a tried-and-true metric for valuing established, profitable companies like TC Energy. Because PE compares a company's current share price to its earnings, it provides a direct, intuitive snapshot of how much investors are willing to pay for each dollar of profit. For businesses with steady track records, the PE ratio is especially useful in assessing whether the stock is being valued fairly relative to its performance.

Of course, the "right" PE multiple can vary considerably, depending on how much growth investors expect and the risks unique to the company or its sector. Faster-growing or lower-risk businesses tend to command higher PE ratios, while more volatile or slow-growing ones usually trade lower.

Currently, TC Energy trades at a PE ratio of 17.7x. That puts it above the Oil and Gas industry average of 12.0x and just below the peer group average of 19.4x. However, to get an even clearer perspective, Simply Wall St’s Fair Ratio comes into play. This proprietary metric considers TC Energy’s future growth, profit margins, industry trends, company size, and risks to suggest a tailored "normal" multiple. In this case, it is 15.8x. The Fair Ratio goes beyond simple peer or industry comparison by integrating all the variables that actually drive value for investors over time.

Because TC Energy’s actual PE ratio of 17.7x is not far above its Fair Ratio of 15.8x, the stock appears to be just slightly overvalued by this measure, but not dramatically so.

Result: OVERVALUEDTSX:TRP PE Ratio as at Oct 2025

PE ratios tell one story, but what if the real opportunity lies elsewhere? Discover companies where insiders are betting big on explosive growth.

Upgrade Your Decision Making: Choose your TC Energy Narrative

Earlier we mentioned that there is an even better way to understand valuation, so let us introduce you to Narratives. A Narrative is a simple, powerful investment tool that lets you craft your own story for a company based on your view on TC Energy’s future profit, revenue growth, and margins to determine what you think its fair value should be. Instead of relying on just one set of projections or analyst consensus, Narratives allow you to link your personal expectations for the business to a full financial forecast that automatically calculates a custom fair value.

The best part is that Narratives are user-friendly and easy to access on Simply Wall St’s Community page, where millions of investors use them every day. By comparing your Narrative’s calculated fair value to TC Energy’s current price, you can decide if now is the right time to buy or sell, and see how your perspective stacks up against the broader market. Narratives update in real time whenever new data or headlines arrive, so your analysis stays relevant even as the facts change.

For example, some investors expect TC Energy’s earnings to drop in the face of long-term decarbonization, resulting in a fair value of CA$59.0, while others anticipate resilient growth and set their fair value as high as CA$80.0. This shows how Narratives let you anchor your investment decisions around what you actually believe.

Do you think there's more to the story for TC Energy? Create your own Narrative to let the Community know!TSX:TRP Community Fair Values as at Oct 2025

This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.

Companies discussed in this article include TRP.TO.

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