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Teck Resources (TSE:TECK.B)
TSX:TECK.B
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Teck Resources
(TSX:TECK.B)
Rating:67Neutral
Price Target:
C$57.00
▲(8.04%Upside)
Positive Factors
Copper Growth
Higher volumes and relatively high prices in copper are expected to lead to strong financial results.
Earnings
Teck Resources reported 1Q adjusted EBITDA of C$927M, beating the C$808M consensus and the C$867M estimate driven by a strong performance from the zinc segment.
Shareholder Returns
Teck's strong balance sheet and ongoing capital returns make it an attractive investment.
Negative Factors
Guidance Revisions
Teck has lowered its 2025 production guidance for several key operations, including QB, HVC, Carmen, and Red Dog.
Production Challenges
Production was negatively impacted by extended maintenance outages, challenging weather, and a nationwide power outage, leading to delays in the required lifts for the development of the Tailings Management Facility.
Project Execution Risks
Execution on project development is a risk, as the company plans to sanction new projects this year.
Teck Resources (TECK.B) vs. iShares MSCI Canada ETF (EWC)
Market Cap
$25.39B
Dividend Yield0.93%
Average Volume (3M)1.23M
Price to Earnings (P/E)74.0
Beta (1Y)1.68
Revenue Growth-22.39%
EPS Growth-77.05%
CountryCA
Employees7,200
SectorBasic Materials
Sector Strength67
IndustryIndustrial Materials
Share Statistics
EPS (TTM)0.60
Shares Outstanding490,400,000
10 Day Avg. Volume1,251,283
30 Day Avg. Volume1,229,808
Financial Highlights & Ratios
PEG Ratio5.72
Price to Book (P/B)0.97
Price to Sales (P/S)0.00
P/FCF Ratio-29.62
Enterprise Value/Market CapN/A
Enterprise Value/RevenueN/A
Enterprise Value/Gross ProfitN/A
Enterprise Value/EbitdaN/A
Forecast
1Y Price Target
$64.42Price Target Upside22.10% Upside
Rating ConsensusStrong Buy
Number of Analyst Covering14
Teck Resources Business Overview & Revenue Model
Company DescriptionTeck Resources Limited (TECK.B) is a diversified natural resources company headquartered in Vancouver, Canada. It is engaged in mining and mineral development with operations and projects in Canada, the United States, Chile, and Peru. The company primarily produces steelmaking coal, copper, and zinc, and it also has investments in energy assets. Teck Resources is committed to responsible mining practices and sustainable resource development.
How the Company Makes MoneyTeck Resources generates revenue through the extraction, production, and sale of natural resources, primarily focusing on steelmaking coal, copper, and zinc. The company's revenue model involves mining these raw materials from its various operations and selling them to industrial customers worldwide. Steelmaking coal, used in the production of steel, remains a significant contributor to its earnings. Copper, essential for electrical applications and infrastructure, and zinc, used for galvanization and other industrial purposes, also form substantial parts of its revenue streams. Teck Resources' earnings are influenced by commodity prices, production volumes, and operational efficiencies. Additionally, the company benefits from strategic partnerships and joint ventures in certain projects, which can enhance its production capacity and market reach.
Teck Resources Earnings Call Summary
Earnings Call Date:Apr 24, 2025
(Q1-2025)
| % Change Since: 9.08%|
Next Earnings Date:Jul 24, 2025
Earnings Call Sentiment Neutral
Teck Resources reported strong financial performance with increased EBITDA and successful project milestones, indicating resilience and effective operational strategies. However, challenges such as production impacts at QB, geopolitical risks, and a safety incident at Antamina present ongoing challenges. The company maintains a strong balance sheet and continues to return value to shareholders.Q1-2025 Updates
Positive Updates
Significant Increase in Adjusted EBITDA
Adjusted EBITDA more than doubled to $927 million, driven by higher commodity prices and increased copper sales volumes.
Strong Operational Performance
Key operations such as Highland Valley, Carmen de Andacollo, and Trail saw strong profit due to successful initiatives to improve profitability and cash flow generation.
Completion of QB Project Finance Testing
QB successfully achieved completion testing requirements under the $2.5 billion USD project finance facility, providing confidence in ramp-up to steady state by year-end.
Increased Copper Production and Improved Margins
Copper production increased by 7% to 106,000 tons, with a net cash unit cost improvement of 32 cents US per pound to $2.04 US per pound.
Robust Balance Sheet
The company maintained a strong balance sheet with a net cash position of $764 million and liquidity of $10 billion.
Return of Cash to Shareholders
$568 million returned to shareholders year-to-date through share buybacks and dividends.
Negative Updates
Production Challenges at QB
QB production was impacted by extended shutdowns, a nationwide power outage, and challenging weather, impacting the rate of material movement for tailings lifts.
Geopolitical Risks and Trade Challenges
Potential impact from tariffs and retaliatory trade measures, particularly affecting sales of Red Dog concentrate to China, representing less than 20% of zinc and lead concentrate sales.
Fatality at Antamina
A fatality occurred at Antamina, where Teck holds a non-operating interest, highlighting ongoing safety challenges.
Company Guidance
During the first quarter of 2025, Teck Resources Limited reported significant improvements in profitability, driven by higher commodity prices and increased sales volumes. Their adjusted EBITDA more than doubled to $927 million, while copper production increased by 7% and copper sales volumes rose by 11% compared to the previous year. The company maintained a strong balance sheet with a net cash position of $764 million and liquidity of $10 billion. Teck continued to return cash to shareholders, with $568 million distributed year-to-date through dividends and share buybacks. The company also achieved significant milestones, including completion testing requirements for the $2.5 billion QB project finance facility, despite facing operational challenges such as a nationwide power outage in Chile. Teck's annual guidance remains unchanged, with expectations for copper production to grow to between 490,000 and 565,000 tons for the full year.Teck Resources Financial Statement Overview
Summary
Teck Resources demonstrates strong revenue growth and operational efficiency. However, profitability margins and cash flow generation are concerning. The balance sheet shows low leverage, providing stability, but liquidity issues need to be addressed.Income Statement
Teck Resources shows a mixed performance in its income statement. The TTM data indicates a gross profit margin of 22.37%, a net profit margin of 3.67%, and an EBIT margin of 9.48%. These margins suggest moderate profitability. However, the revenue growth rate from 2024 to TTM is a robust 30.23%, highlighting significant revenue expansion after a downturn in 2024. The EBITDA margin at 30.62% is strong, indicating efficient operations despite the challenges faced. While the revenue trajectory is positive, net income fluctuations and declining margins from earlier years present a concern for profitability stability.65
Positive
Balance Sheet
The balance sheet of Teck Resources is relatively strong. The debt-to-equity ratio stands at 0.38, reflecting a conservative use of leverage. The TTM return on equity is 1.68%, indicating modest returns on shareholders' equity. The equity ratio is 56.28%, suggesting a strong reliance on equity financing and a solid financial foundation. The stability in equity position and manageable debt levels are positives, though ROE could be improved for better shareholder returns.75
Positive
Cash Flow
Teck Resources' cash flow performance is mixed. The operating cash flow to net income ratio is 4.38, showcasing strong cash generation relative to net income. However, the free cash flow to net income ratio is negative, indicating challenges in maintaining free cash flow after capital expenditures. The free cash flow growth rate from 2024 to TTM is concerning at -643.23%, pointing to significant cash flow difficulties. The robust operating cash flow is a positive, but negative free cash flows highlight potential liquidity issues.60
Neutral
| Breakdown | |||||
| TTM | Dec 2024 | Dec 2023 | Dec 2022 | Dec 2021 | Dec 2020 |
|---|---|---|---|---|---|
| Income Statement | Total Revenue | ||||
| 11.81B | 9.06B | 15.01B | 17.32B | 13.48B | 8.95B | Gross Profit |
| 2.64B | 1.61B | 5.14B | 8.57B | 5.08B | 1.33B | EBIT |
| 1.12B | -9.00M | 4.12B | 6.99B | 4.85B | 438.00M | EBITDA |
| 3.62B | 1.78B | 6.15B | 8.44B | 6.37B | 648.00M | Net Income Common Stockholders |
| 433.00M | 406.00M | 2.41B | 3.32B | 2.87B | -944.00M |
| Balance Sheet | Cash, Cash Equivalents and Short-Term Investments | ||||
| 6.21B | 7.59B | 744.00M | 1.88B | 1.43B | 450.00M | Total Assets |
| 45.89B | 47.04B | 56.19B | 52.36B | 47.37B | 41.28B | Total Debt |
| 9.93B | 9.96B | 11.09B | 10.02B | 9.33B | 7.88B | Net Debt |
| 3.72B | 2.38B | 10.35B | 8.13B | 7.90B | 7.43B | Total Liabilities |
| 18.93B | 19.94B | 27.90B | 25.85B | 23.59B | 20.57B | Stockholders Equity |
| 25.82B | 26.08B | 26.99B | 25.47B | 23.00B | 20.04B |
| Cash Flow | Free Cash Flow | ||||
| -842.00M | 155.00M | -1.70B | 2.52B | 25.00M | -2.06B | Operating Cash Flow |
| 1.90B | 2.79B | 4.08B | 7.98B | 4.74B | 1.56B | Investing Cash Flow |
| 7.04B | 6.17B | -4.76B | -5.68B | -4.82B | -3.67B | Financing Cash Flow |
| -4.43B | -2.56B | -469.00M | -1.99B | 1.06B | 1.53B |
Teck Resources Technical Analysis
Positive
52.76
Price Trends
49.40
Positive
54.63
Negative
59.49
Negative
Market Momentum
0.50
Negative
58.87
Neutral
63.45
Neutral
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For TSE:TECK.B, the sentiment is Positive. The current price of 52.76 is above the 20-day moving average (MA) of 50.99, above the 50-day MA of 49.40, and below the 200-day MA of 59.49, indicating a neutral trend. The MACD of 0.50 indicates Negative momentum. The RSI at 58.87 is Neutral, neither overbought nor oversold. The STOCH value of 63.45 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for TSE:TECK.B.
Teck Resources Peers Comparison
Overall Rating
UnderperformOutperform
Sector (51)
Financial Indicators
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
75 Outperform | C$1.10B | 7.53 | 29.84% | 10.59% | 76.60% | 107.92% | |
70 Outperform | C$1.25B | 12.33 | 19.46% | 1.32% | -16.14% | 1038.04% | |
69 Neutral | $15.56B | 25.35 | 9.67% | ― | ― | 137.28% | |
67 Neutral | $25.39B | 73.96 | 1.32% | 0.93% | -22.39% | -77.05% | |
62 Neutral | C$25.39B | 73.97 | 1.40% | 0.95% | -22.39% | -77.05% | |
52 Neutral | C$2.26B | ― | -137.38% | ― | ― | -19.29% | |
51 Neutral | $2.03B | -1.13 | -21.36% | 3.65% | 2.87% | -30.54% |
* Basic Materials Sector Average
Performance Comparison
TSE:TECK.B
Teck Resources
52.83
-13.78
-20.68%
TSE:IVN
Ivanhoe Mines
11.18
-6.83
-37.92%
TSE:TECK.A
Teck Resources
53.07
-13.49
-20.27%
TSE:AFM
Alphamin Resources
0.82
-0.19
-18.81%
TSE:SKE
Skeena Resources
19.49
13.57
229.22%
TSE:ALS
Altius Minerals
27.00
5.34
24.65%
Glossary
OutperformA stock rated as "Outperform" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock is likely to deliver higher returns compared to the average returns of other stocks in the same sector or market index. Investors might consider this stock a good buying opportunity.
NeutralA stock rated as "Neutral" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly attractive nor unattractive for investment. Investors may consider holding onto the stock, as it is not expected to either significantly outperform or underperform the market.
UnderperformA stock rated as "Underperform" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock may deliver lower returns compared to the average returns of other stocks in the same sector or market index. Investors might consider selling the stock or avoiding it as an investment.
Disclaimer
This AI Analyst Stock Report is automatically generated by our AI systems using advanced algorithms and publicly available financial, technical, and market data. While the information provided aims to be accurate and insightful, it is intended for informational purposes only and should not be considered financial advice. Any content created by an AI (Artificial Intelligence) system may contain inaccuracies and/or contain errors. Investing in stocks carries inherent risks, and past performance is not indicative of future results. This report does not account for your personal financial circumstances, objectives, or risk tolerance. Always conduct your own research or consult with a qualified financial advisor before making investment decisions. The analysis and recommendations provided are based on historical and current data and may not fully reflect future market conditions or unexpected developments. Neither the creators of this report nor its affiliated entities guarantee the accuracy, completeness, or reliability of the information presented. Use this report at your own discretion and risk.