Teck Resources (TECK.B) AI Stock Analysis

• Market Cap: $22.62B
• Dividend Yield: 2.14%
• Average Volume (3M): 1.41M
• Price to Earnings (P/E): 107.7
• Beta (1Y): 1.75
• Revenue Growth: -36.04%
• EPS Growth: -84.78%
• Country: CA
• Employees: 7,200
• Sector: Basic Materials
• Sector Strength: 64
• Industry: Industrial Materials
• EPS (TTM): 0.38
• Shares Outstanding: 481,300,000
• 10 Day Avg. Volume: 1,046,500
• 30 Day Avg. Volume: 1,407,186
• PEG Ratio: N/A
• Price to Book (P/B): N/A
• Price to Sales (P/S): N/A
• P/FCF Ratio: N/A
• Enterprise Value/Market Cap: 1.46
• Enterprise Value/Revenue: 3.31
• Enterprise Value/Gross Profit: 16.27
• Enterprise Value/Ebitda: 12.40
• 1Y Price Target: $58.75
• Price Target Upside: 29.77% Upside
• Rating Consensus: Moderate Buy
• Number of Analyst Covering: 18

• Rating: 54 Neutral
• Price Target: C$46.00 ▲(1.61% Upside)

Teck Resources' overall stock score is primarily impacted by its financial performance challenges, including declining revenue and profitability pressures. The technical analysis indicates a bearish trend, and the high P/E ratio suggests overvaluation concerns. Despite these challenges, the earnings call highlighted strong liquidity and strategic advancements, providing some positive outlook.

Positive Factors

Analyst Ratings

Analyst maintains a C$55 target and Outperform rating, showing confidence in future performance.

Financial Performance

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.

Strategic Initiatives

The board announced the sanctioning of the Highland Valley Copper Mine Life Extension, which is part of TECK’s strategy to double copper production by the end of the decade.

Negative Factors

Capital Expenditure

Capex escalation is a cause for concern, with a planned spend of ~C$2.3-2.5B in sustaining and growth capex this year.

Financial Guidance

Full-year copper production guidance was lowered, and the net cash unit cost/lb. target range was increased due to ongoing TMF work and higher transportation expenses from the shiploader outage.

Operational Challenges

Development work at the Tailings Management Facility continued to limit online time and sales trailed production due to the negative impact from high seas and the previously disclosed shiploader outage.

Teck Resources Business Overview & Revenue Model

Company Description

Teck Resources Limited engages in exploring for, acquiring, developing, and producing natural resources in Asia, Europe, and North America. It operates through Steelmaking Coal, Copper, Zinc, Energy, and Corporate segments. The company's principal products include steelmaking coal; copper, gold, blended bitumen, lead, silver, molybdenum, zinc, and zinc concentrates; chemicals, fertilizers, and other metals. It also produces indium and germanium. In addition, the company holds interest in Frontier oil sands projects in the Athabasca region of Alberta; and owns interests in exploration and development projects in Australia, Chile, Ireland, Mexico, Peru, Turkey, and the United States. The company was formerly known as Teck Cominco Limited and changed its name to Teck Resources Limited in April 2009. Teck Resources Limited was founded in 1913 and is headquartered in Vancouver, Canada.

How the Company Makes Money

Teck Resources generates revenue through the sale of its core products: copper, zinc, and metallurgical coal. The company profits by selling these commodities to various industries, including construction, automotive, and steelmaking. Key revenue streams include the sale of mined metals and minerals, which are influenced by global market prices. Additionally, Teck has established significant partnerships and joint ventures that enhance its operational efficiency and market reach. The company also focuses on cost management and operational excellence to maximize profitability. Fluctuations in commodity prices, changes in demand from industrial sectors, and regulatory factors are critical to Teck's financial performance.

Teck Resources Financial Statement Overview

Summary

Teck Resources faces challenges with declining revenue and profitability pressures. While the balance sheet remains stable with moderate leverage, cash flow management requires attention due to negative free cash flow. The company needs to focus on improving revenue growth and operational efficiency to enhance financial performance.

Income Statement

Teck Resources has shown a decline in revenue over the TTM, with a negative revenue growth rate of -15.67%. The gross profit margin stands at 20.36%, and the net profit margin is relatively low at 2.77%, indicating pressure on profitability. The EBIT and EBITDA margins are 8.52% and 26.70%, respectively, showing some operational efficiency. However, the declining revenue trend is a concern.

Balance Sheet

The company maintains a moderate debt-to-equity ratio of 0.39, suggesting a balanced approach to leverage. Return on equity is low at 1.09%, reflecting challenges in generating returns for shareholders. The equity ratio is not provided, but the overall balance sheet indicates stability with room for improvement in profitability.

Cash Flow

Operating cash flow is positive, but free cash flow is negative, indicating potential liquidity challenges. The operating cash flow to net income ratio is 0.36, suggesting limited cash generation relative to net income. The free cash flow to net income ratio is negative, highlighting concerns over cash management and investment efficiency.

Breakdown	TTM	Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Income Statement
Total Revenue	9.96B	9.06B	15.01B	17.32B	13.48B	8.95B
Gross Profit	2.03B	1.61B	5.14B	8.57B	5.08B	1.33B
EBITDA	2.66B	1.92B	6.15B	8.44B	6.37B	648.00M
Net Income	276.00M	406.00M	2.41B	3.32B	2.87B	-944.00M
Balance Sheet
Total Assets	42.97B	47.04B	56.19B	52.36B	47.37B	41.28B
Cash, Cash Equivalents and Short-Term Investments	4.77B	7.59B	744.00M	1.88B	1.43B	450.00M
Total Debt	9.42B	9.96B	11.09B	10.02B	9.33B	7.88B
Total Liabilities	17.62B	19.94B	27.90B	25.85B	23.59B	20.57B
Stockholders Equity	24.38B	26.08B	26.99B	25.47B	23.00B	20.04B
Cash Flow
Free Cash Flow	-932.00M	155.00M	-1.70B	2.52B	25.00M	-2.06B
Operating Cash Flow	995.00M	2.79B	4.08B	7.98B	4.74B	1.56B
Investing Cash Flow	7.74B	6.17B	-4.76B	-5.68B	-4.82B	-3.67B
Financing Cash Flow	-4.98B	-2.56B	-469.00M	-1.99B	1.06B	1.53B

Teck Resources Technical Analysis

• Technical Analysis Sentiment: Negative
• Last Price: 45.27
• 50DMA: Negative
• 100DMA: Negative
• 200DMA: Negative
• MACD: Negative
• RSI: Neutral
• STOCH: Neutral

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For TSE:TECK.B, the sentiment is Negative. The current price of 45.27 is above the 20-day moving average (MA) of 45.24, below the 50-day MA of 48.73, and below the 200-day MA of 54.34, indicating a neutral trend. The MACD of -0.44 indicates Negative momentum. The RSI at 44.86 is Neutral, neither overbought nor oversold. The STOCH value of 59.50 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for TSE:TECK.B.

Teck Resources Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
AFM	79 Outperform	C$1.29B	7.90	33.49%	6.86%	73.61%	119.38%
ALS	70 Neutral	C$1.38B	13.96	18.70%	1.22%	-13.16%	588.65%
TECK.A	62 Neutral	C$22.62B	109.15	0.82%	2.19%	-36.04%	-84.78%
Sector *	61 Neutral	$10.27B	6.37	0.76%	2.91%	3.10%	-36.03%
TECK.B	54 Neutral	$22.62B	107.68	0.70%	2.14%	-36.04%	-84.78%
IVPAF	―	$11.88B	31.20	7.89%	―	―	―
SKE	52 Neutral	C$2.75B	―	-115.88%	―	―	-0.21%