Enbridge, TC Energy downgraded; TD says growth thesis has ‘played out’

Shares of Canadian pipeline giants Enbridge (ENB.TO)(ENB) and TC Energy (TRP.TO)(TRP) fell on Tuesday after stock market analysts issued downgrades, raising concerns about high valuations, and their respective pace of long-term growth.

Enbridge and TC each reported financial results last Friday. The two firms own vast networks of natural gas pipelines that stretch across North America. Executives at the Calgary-based mid-stream companies see these assets benefiting from rising energy consumption, fuelled in part by the proliferation of data centres to power artificial intelligence.

Enbridge says its secured backlog of projects through 2033 is worth $39 billion, spanning natural gas, oil, and renewable energy. TC says its current backlog is worth $21.4 billion.

However, in a note to clients on Tuesday, TD Cowan analyst Aaron MacNeil downgraded Enbridge and TC Energy, as well as Pembina Pipeline (PPL.TO)(PBA), a smaller rival to the two pipeline giants.

“In our January 2026 industry update, we said that companies that provide visibility to long-term growth will trade at a premium. Following strong share-price performances [year-to-date], we believe that this thesis has played out,” he wrote.

Toronto-listed Enbridge and TC shares have gained about 5.6 per cent and 9.6 per cent, respectively, in 2026. On Tuesday, Enbridge stock lost about 3.4 per cent in mid-day trading. TC shares fell around 2.6 per cent.

CIBC Capital Markets downgraded TC shares on Monday, cutting its rating to “neutral” from “outperformer.”

“Recent price appreciation causes us to downgrade our rating,” analyst Robert Catellier wrote in a note to clients. “While the fundamentals and outlook remain promising, we’d prefer a better entry point. The risk to our downgrade is if the company originates projects at a faster rate than contemplated in our estimates.”

Catellier raised his price target to $85 per share, from $81.

TD Cowan’s MacNeil downgraded Enbridge, TC, and Pembina to “hold” from “buy.” For Enbridge, he raised his price target to $72 per share from $70, boosted his target for TC to $88 from $84, and moved Pembina to $62 from $59.

“We continue to observe anecdotal evidence of elevated funds flow into both Canadian energy as well as defensive names with strong secular growth tailwinds,” he wrote. “Canadian mid-stream checks both of these boxes.”

In a research note published on Sunday, BMO Capital Markets analyst Ben Pham said Enbridge’s $39 billion project backlog is expected to push “even higher in the coming years. He says the company is delivering higher return on its investments, without any compromises on asset quality.