Like a lot of Canadian businesses these days, energy stock TC Energy (TSE:TRP) is looking to build a future that does not quite so heavily involve the United States. TC Energy is looking to Asia to be a big help in replacing the American market, but that is a move that investors are less than pleased about. TC Energy shares slid over 3% in Thursday morning’s trading.
TC Energy, according to remarks from CEO Francois Poirier, believes that it can become the leading supplier of liquefied natural gas (LNG) to Asia. It has the supply, Poirier noted, as well as advantages in transportation costs and a ready supply of LNG. The demand is clearly there as well, so all it takes is the political will to go forward, Poirier noted.
After all, LNG coming out of Western Canada could easily go to Asian markets, especially since both are right on the Pacific Ocean and all. And new buyers would diversify TC Energy’s income stream, allowing it to be less dependent on the United States and less susceptible to unexpected tariff hits. Though dealing with Asian markets does have some risks of its own—there is a reason all those companies are departing China for Vietnam, after all—there is seldom anything wrong with diversification of income streams.
Michigan Pipeline Rupture
But TC Energy is not looking to depart the United States market, just diversify a bit. And that makes a recent problem that cropped up in Michigan all the worse. Near a town called Fennville, a TC Energy pipeline sprung a leak, which prompted an outage of natural gas in the region, impacting 5,200 homes. It is still fairly cold in Michigan, and likely will be for another two to six weeks, depending on how the weather shakes out. Thus the outage will likely be felt for a while, particularly at night.
The outage may last several days as repairs are underway. The outage was caused when a “third party”, possibly a farmer getting ready for planting season, struck the pipeline. But with over 9,300 miles of pipeline to account for, it is not particularly surprising that one part of that system was hit.
Is TC Energy Stock a Good Buy?
Turning to Wall Street, analysts have a Moderate Buy consensus rating on TSE:TRP stock based on five Buys or four Holds assigned in the past three months, as indicated by the graphic below. After a 47.32% rally in its share price over the past year, the average TC Energy price target of C$73.12 per share implies 15.51% upside potential.
