Morgan Stanley Downgrades TransCanada, Notes Capital Inefficiencies Draw On Performance

Credit Suisse on Monday downgraded TransCanada (NYSE: TRP) from Outperform to Neutral and reiterated the $58 price target.

The downgrade comes as Credit Suisse sees poor risk-reward going into quarterly results, most likely driven by declines in selected forward power markets and TransCanada's plan to gradually improve capital efficiencies. Addressing capital efficiencies, Credit Suisse is seeing a slow procession toward improved capital efficiency, which is causing the bank to put a lower probability on more radical restructuring.

Calling for more near-term certainty, analyst Andrew Kuske wrote, "A clearer indication of timing, the structured accretion and the mutual benefit should aid the re-rating of...TRP."

The note highlighted TransCanada's asset base being well positioned to take advantage of investment themes surrounding the Albert oil sands, west coast LNG and low cost generation exposure in tight power markets.

TransCanada recently traded at $51.66, down 0.02 percent.