Teck Resources (TECK.B) AI Stock Analysis

• Market Cap: $21.78B
• Dividend Yield: 2.2%
• Average Volume (3M): 1.67M
• Price to Earnings (P/E): 103.6
• Beta (1Y): 1.69
• Revenue Growth: -36.04%
• EPS Growth: -84.78%
• Country: CA
• Employees: 7,200
• Sector: Basic Materials
• Sector Strength: 57
• Industry: Industrial Materials
• EPS (TTM): 0.38
• Shares Outstanding: 481,300,000
• 10 Day Avg. Volume: 1,989,975
• 30 Day Avg. Volume: 1,665,113
• PEG Ratio: -0.89
• Price to Book (P/B): 1.15
• Price to Sales (P/S): 3.32
• P/FCF Ratio: 194.18
• Enterprise Value/Market Cap: 1.51
• Enterprise Value/Revenue: 3.31
• Enterprise Value/Gross Profit: 16.27
• Enterprise Value/Ebitda: 12.40
• 1Y Price Target: $60.11
• Price Target Upside: 31.82% Upside
• Rating Consensus: Moderate Buy
• Number of Analyst Covering: 17

• Rating: 59 Neutral
• Price Target: C$50.00 ▲(9.65% Upside)

Teck Resources faces a mixed outlook. Strong financial performance and strategic initiatives are overshadowed by technical indicators suggesting bearish momentum and high valuation concerns. Operational challenges and increased CapEx further add to the risk profile.

Positive Factors

Analyst Ratings

Teck Resources maintains a Buy rating as analysts continue to see value in TECK’s copper growth story despite recent issues.

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.

Growth Strategy

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 Performance

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.

Production 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 is a diversified natural resources company headquartered in Vancouver, Canada. It is primarily engaged in the mining and refining of essential minerals and metals, including steelmaking coal, copper, zinc, and energy. Teck operates through various segments, focusing on sustainable mining practices and technological advancements to supply resources that are crucial to global infrastructure and energy solutions.

How the Company Makes Money

Teck Resources makes money through the extraction, production, and sale of natural resources, primarily steelmaking coal, copper, and zinc. Steelmaking coal, used in the production of steel, is one of the company's largest revenue contributors. Copper and zinc are also significant revenue streams, with the company operating several major mines across North and South America. Additionally, Teck is involved in the energy sector, particularly through its investment in oil sands projects. The company benefits from strategic partnerships and joint ventures that enhance its operational capabilities and market reach. Teck's revenues are influenced by global commodity prices, demand for raw materials, and its ability to maintain efficient and sustainable mining operations.

Teck Resources Financial Statement Overview

Summary

Teck Resources demonstrates strong revenue growth and operational efficiency, with a robust balance sheet and low leverage. However, concerns remain about profitability margins and free cash flow generation, which could impact long-term financial stability.

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.

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.

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.

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: 45.60
• 50DMA: Negative
• 100DMA: Negative
• 200DMA: Negative
• MACD: Positive
• 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 45.6 is below the 20-day moving average (MA) of 48.71, below the 50-day MA of 51.32, and below the 200-day MA of 56.30, indicating a bearish trend. The MACD of -2.21 indicates Positive momentum. The RSI at 38.55 is Neutral, neither overbought nor oversold. The STOCH value of 29.45 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	82 Outperform	C$1.17B	8.10	33.49%	9.68%	73.61%	119.38%
ALS	81 Outperform	C$1.38B	13.54	19.46%	1.19%	-16.14%	1038.04%
IVN	69 Neutral	C$15.77B	28.79	7.89%	―	―	137.28%
TECK.B	59 Neutral	$21.78B	103.63	0.70%	2.20%	-36.04%	-84.78%
TECK.A	58 Neutral	C$21.78B	107.08	0.82%	2.20%	-36.04%	-84.78%
SKE	52 Neutral	C$2.47B	―	-137.38%	―	―	-19.29%
Sector *	44 Neutral	AU$1.47B	-5.90	-41.17%	4.21%	-3.35%	-41.14%