Zacks Investment Research upgraded shares of TC PipeLines, L.P. (TCP) from UNDERPERFORM to NEUTRAL on June 24, 2013, with a target price of $48.00.
Following TC PipeLines' proposed acquisition of additional stakes in two major U.S. gas systems, we are upgrading the natural gas transporter to Neutral from Underperform. We expect the deal – should it go through to be immediately accretive to the Calgary, Alberta-headquartered MLP's earnings and distributable cash. We also like TC PipeLines' steady cash-flow generating pipeline assets, which provide stability and financial capacity to deliver cash distributions in a disciplined manner. While being incrementally more positive on the partnership, we believe TC PipeLines' value will likely remain clouded, as the partnership struggles with volatile natural gas fundamentals. Consequently, we see the stock performing in line with the broader market.
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