TC Energy is an attractive option for investors searching for ways to gain exposure to nuclear energy, according to Morgan Stanley. The investment bank has an overweight rating on the energy company’s stock. “TRP offers one of the most attractive risk-adjusted ways to invest in nuclear power growth through Bruce Power, one of the largest operating nuclear facilities in the world and essential infrastructure to meeting Ontario’s power needs,” analyst Robert Kad said in a note to clients, calling the stock a “low-risk nuclear play.” TC Energy owns around 48% interest in Bruce Power, one of the largest operating nuclear facilities in the world and the only private sector nuclear generator in Canada. Morgan Stanley’s endorsement of the stock comes amid signs that interest in nuclear energy is gaining steam. In 2024, nuclear reactors generated 2,667 terawatt-hours (TWh) of electricity, surpassing their previous record of 2,660 TWh in 2006, according to the World Nuclear Association. It’s a trend from which TC Energy is poised to benefit, particularly as the firm updates and expands its nuclear capabilities through two key initiatives: The Major Component Replacement (MCR) program and the Bruce C project, according to Morgan Stanley. “Bruce has significant growth potential through [its] two investments,” Kad wrote. Under the MCR program, TC Energy aims to refurbish nuclear reactors to extend their life by several decades. And it has already made some headway on that front, completing the first part of its plan to increase the longevities of its nuclear facilities more than two years ago, according to the company’s statement dated Sept. 15, 2023. TC Energy is also planning to expand its Bruce Power nuclear site in Ontario. Under its Bruce C project, the firm aims to build up to 4,800 megawatts of capacity at that location, according to a webpage for the initiative. Those efforts make TC Energy a good option through which investors can increase their exposure to recently renewed interest in nuclear energy, per Morgan Stanley. However, traders have tended to gravitate toward more speculative, “purer-play expressions” that offer high long-term growth at significant development risk,” the firm’s analyst noted. “We have found that TRP is generally lost in that discussion – even among investors more fluent in nuclear generation and utilities – despite being one of the highest quality, lowest risk ways to participate in the buildout of nuclear power, in our view,” Kad wrote. Shops on the Street are split on the stock. Three analysts have a buy rating on TC Energy, while two have a hold on the stock and one has an underperform rating on it, LSEG data shows. Shares have risen 10% in the year to date.
