Zacks Investment Research downgraded shares of TC PipeLines, L.P. (TCP) from OUTPERFORM to NEUTRAL on September 24, 2014, with a target price of $66.00.
We are lowering our recommendation for TC PipeLines to Neutral from Outperform. The natural gas transporter is facing headwinds on its contracting efforts for the Great Lakes pipeline system on the back of structural challenges. The most recent settlement with Northern Border – that lowered the partnership's equity earnings and cash flows has also been a negative. As usual, we remain concerned about weak natural gas fundamentals. However, we expect the partnership's recent stake purchases in two major U.S. gas systems to be immediately accretive to earnings and distributable cash. As it is, we are a fan of TC PipeLines' steady cash-flow generating pipeline assets. Consequently, we see the stock performing in line with the broader market.
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