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TC Energy (TSX:TRP) Stock Looks Rich Despite Its 186% Three Year Run

Simply Wall St · 22h ago

TC Energy stock has delivered strong returns over the last few years. Yet at around C$99.59, the valuation checks lean toward the shares looking expensive rather than like an obvious bargain.

  • Over the last 3 years, TC Energy has returned 185.5%, which puts extra focus on whether the current price still leaves much room for further value to be created.
  • Future valuation for TC Energy may depend heavily on how reliably it can convert its asset base into steady cash flows. At the same time, the capital intensity of its business and its funding needs can weigh on what investors are willing to pay.
  • TC Energy scores just 1 out of 6 on the broader valuation checks, which points to a stock that currently leans expensive rather than clearly underpriced.

The issue now is whether TC Energy's current share price already reflects most of the value in the story, or if the recent strength still leaves a reasonable margin for new investors.

TC Energy delivered 60.4% returns over the last year. See how this stacks up to the rest of the Oil and Gas industry.

Is TC Energy Getting Expensive on Earnings?

The P/E ratio is a useful way to think about how much you are paying for each dollar of TC Energy's earnings. TC Energy currently trades on a P/E of about 29.4x, which is higher than the Oil and Gas industry average of 24.7x and below the peer group average of around 43.1x.

A tailored fair P/E ratio for TC Energy, based on factors such as its margins, risk profile and size, is estimated at 26.1x. That is a noticeable gap to the current 29.4x, which indicates investors are paying a richer price than this framework would suggest. On this measure, the stock is above the industry average and is also trading above the level implied by the company specific fair ratio.

On the P/E multiple, TC Energy stock currently screens as overvalued relative to both its industry and a more tailored fair value benchmark.

TSX:TRP P/E Ratio as at Jul 2026
TSX:TRP P/E Ratio as at Jul 2026

See what the numbers say about this price — find out in our valuation breakdown.

The TC Energy Narrative: What Would Justify Today's Price?

Simply Wall St Narratives for TC Energy pick up where the valuation puzzle leaves off by spelling out which combinations of future growth, margins and earnings would need to hold for TC Energy's stock to be worth materially more or less than it is today. Each narrative links its number to a concrete view on how TC Energy's growth, profitability and risks might evolve, giving you a reference point you can return to as fresh information comes through.

Share a narrative on TC Energy to present your own number-driven view on where its growth, margins, and execution go from here, and see how that thesis holds up as new results and information arrive.

Do you think there's more to the story for TC Energy? Head over to our Community to see what others are saying!

The Bottom Line

For TC Energy, the current market multiples point to an overvalued stock, with investors already paying up relative to both industry peers and a tailored fair P/E ratio. The broader valuation checks are weak, which suggests limited room for error in how future cash flows, funding needs and capital intensity play out from here. The crux for you is whether TC Energy can sustain the kind of earnings profile that keeps the current premium intact, or whether a more cautious stance on its capital demands eventually pulls the valuation closer to its fair multiple.

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.