Teck Resources: Buy Rating Affirmed Amid Growth Prospects and Strategic Initiatives

Matt Murphy, an analyst from BMO Capital, has initiated a new Buy rating on Teck Resources (TECK).

Matt Murphy has given his Buy rating due to a combination of factors that highlight Teck Resources’ potential for growth and shareholder value. Despite initial setbacks in the Quebrada Blanca (QB) project, Murphy anticipates a recovery in production by the second quarter of 2025, supported by optimization efforts and debottlenecking. The company’s commitment to shareholder returns is evident through its aggressive share buyback program, which is expected to bolster the stock price.
Murphy also notes that Teck Resources’ valuation multiples have improved following the sale of its coal business, with the company trading at a favorable free cash flow yield compared to peers. The potential for mergers and acquisitions adds a layer of downside protection, as Teck is seen as an attractive target due to its size, low geopolitical risk, and growth prospects. With a target price set at C$56, based on a combination of price-to-net asset value and enterprise value-to-EBITDA multiples, Murphy believes the company’s strategic initiatives and capital returns will sustain its premium valuation.

In another report released yesterday, Morgan Stanley also maintained a Buy rating on the stock with a $42.00 price target.

Based on the recent corporate insider activity of 13 insiders, corporate insider sentiment is neutral on the stock.