Morgan Stanley likes this under-the-radar nuclear play, calls it a 'low-risk' option

Morgan Stanley reiterated an overweight view on TC Energy, highlighting it as a low-risk way to gain nuclear exposure through its 48% stake in Bruce Power. The bank pointed to growth optionality from the Major Component Replacement program and the Bruce C project, which could add up to 4,800 MW of capacity. Shares are up 10% year to date, and Street ratings remain mixed but tilted positive.

Analysis

TRP looks less like a pure nuclear beta trade and more like a scarcity asset on regulated, contracted cash flows with embedded option value on long-duration power demand. The market is still pricing nuclear as a development story, so the key edge is that TRP monetizes the theme through operating leverage, not binary permitting risk. That tends to compress downside: even if new-build enthusiasm cools, the refurbishment cycle and utility-like earnings should keep valuation support intact.

The second-order winner is not just TRP, but the broader Canadian power ecosystem: engineering, heavy-equipment, and outage-services vendors should see a multi-year queue of work as reactor life-extension and capacity additions tighten specialized labor and component supply. Conversely, speculative nuclear developers may underperform on a relative basis because every incremental dollar of investor attention toward a safer incumbent raises the cost of capital hurdle for pre-revenue names. This is a classic “quality wins in a crowded theme” setup.

The contrarian point is that the stock may still be under-owned because investors mentally bucket it with boring pipelines rather than nuclear scarcity. If that framing shifts, the rerating could come from multiple expansion rather than earnings revisions, which is cleaner and faster. The main reversal risk is execution slippage on outage schedules or capex inflation; those usually show up over quarters, not days, so the near-term tape should trade more on sentiment than fundamentals.

Key Decisions for Investors

• Go long TRP on any 1-2% pullback; 3-6 month horizon with a favorable risk/reward if the market continues to re-rate it as the 'safe nuclear' exposure rather than a conventional utility.
• Pair trade: long TRP / short a basket of speculative nuclear developers over 6-12 months to capture a likely quality premium as capital shifts from optionality to execution.
• Buy TRP call spreads 6-9 months out to express rerating upside while limiting downside if nuclear enthusiasm fades before the next catalyst window.
• Use any broad utilities de-rating to add TRP rather than trim; the name should outperform if investors rotate toward defensible power assets with nuclear embedded growth.