CIBC has downgraded TC Energy Corp. (NYSE:TRP) from Outperformer to Neutral, even as it nudged up the company's price target to C$85.00 from C$81.00. The change in rating reflects the analyst firm's view that recent share-price gains have reduced the stock appreciation, despite the company's solid operational performance.
On an operational basis, CIBC described TC Energy's fourth-quarter results as strong. The company delivered an EBITDA beat and posted delivery records across its systems in both Canada and the U.S., underscoring robust throughput and reliability in its infrastructure operations. For the last twelve months, TC Energy reported EBITDA of $6.9 billion and revenue growth of 10.7% over the period.
Capital deployment in the quarter included $600 million of sanctioned projects, which CIBC characterized as light relative to expectations or capacity. Meanwhile, TC Energy has approximately $8 billion of projects that remain classified as pending approval. CIBC flagged further final investment decisions - the formal go-aheads on projects - as the next likely catalyst that could influence the company's stock performance.
The analyst firm also adjusted its valuation inputs and increased its discounted cash flow-based price target to C$85 from C$81. That higher target accompanies the downgrade in recommendation, which CIBC said is driven by the share-price rally rather than a deterioration in fundamentals.
Separately, TC Energy announced a forthcoming automatic conversion of its Series 6 preferred shares into Series 5 shares on January 30, 2026. That conversion follows the company determination that, after the conversion election deadline of January 16, fewer than one million Series 6 shares would remain outstanding. The automatic conversion is being executed under the terms set out in the company 's 2010 prospectus supplement.
According to the company, the conversion will proceed without additional action required from shareholders. TC Energy framed the move as part of an ongoing effort to manage and streamline its share structure; the announcement applies specifically to the Series 6 and Series 5 preferred share classes and affects the company's preferred share offerings.
Context and implications
While CIBC recognized operational strength - citing the EBITDA beat, delivery records and double-digit revenue growth - the broker concluded that valuation after a strong share rally warrants a more cautious stance. The firm noted the light capital sanctions in the quarter and highlighted pending approvals and future final investment decisions as items investors should watch closely.
Investors in TC Energy and participants in the broader energy infrastructure and financial markets will likely monitor the progress of the pending projects and any announcements about FIDs, as well as the administrative steps around the preferred share conversion, which will be automatic if the remaining Series 6 float stays below the threshold after the election window closed.