TC Energy (TRP) is likely to see its stock price increase following a planned spinoff of its liquids pipelines business into South Bow, UBS Securities said in a note Monday.

The current stock price does not reflect the reduction of TC Energy's total debt by about $8 billion after the spinoff, its ability to fill in the CA$1.45 billion ($1.07 billion) of EBITDA lost with South Bow, and the expected growth in data center power demand by over 500 terawatt hours by 2031, positioning the company to benefit significantly, the note said.

"In the near term, we see the South Bow spinoff as a catalyst for TC Energy stock and highlight the company could continue to re-rate post spin," UBS said.

The coal-to-gas transition and new liquefied natural gas opportunities are expected to drive near-term growth, while long-term potential lies in rising demand from new data centers, particularly benefiting interconnection requests for key assets like Columbia Gas in northern Virginia and ANR in the Midwest.

UBS upgraded TC Energy to buy from neutral and raised its price target to CA$71 from CA$61.

Price: 47.37, Change: +0.61, Percent Change: +1.29