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In the volatile global energy market, TransCanada Corp. (NYSE:TRP) may be a low-risk option for investors wanting an infrastructure play with exposure to growth in North American energy demand.

While the company is not cheap by historical measures, TransCanada’s valuation appears to be justified by its prospects for strong earnings growth and the low interest rate environment, Desjardins Securities analyst Daniel Shteyn said in a research note.

He has initiated coverage with a “buy” recommendation and a $43 price target on TransCanada shares, which represents upside of roughly 9%.

The company’s acquisition of ANR Pipeline Co. and ANR Storage Co., which was announced in December, as well as the proposed Keystone pipeline, which will transport crude oil from Alberta’s oilsands to Midwest U.S. refineries, are considered by Mr. Shteyn, to be key enhancements for TransCanada’s pipeline business.

The company reports fourth quarter result on Tues. Jan. 30.


Source: Desjardins Initiates Buy Recommendation on TransCanada