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Teck Resources (TSE:TECK.B)
TSX:TECK.B
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Teck Resources
(TSX:TECK.B)
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Rating:66Neutral
Price Target:
C$76.00
▲(8.34% Upside)
Teck Resources' overall score is driven by strong earnings call highlights, including a strategic merger and improved financial performance. However, concerns about valuation and cash flow management, along with operational challenges, temper the outlook.
Positive Factors
Merger with Anglo American
The merger materially enlarges scale and low-cost copper supply, creating structural cost and market-share advantages. Expected long-term $1.4B EBITDA uplift and incremental copper output support durable cash flow, bargaining power with customers, and capital allocation flexibility for decades.
Strong liquidity and rising EBITDA
Elevated liquidity and improved EBITDA provide long-duration financial flexibility to fund development, exploration, and the merger integration. Robust cash buffers help manage commodity cycles, enable capex consistency, and reduce refinancing risk over the medium term.
Renewable energy transition at Chile operations
Securing 100% renewable power reduces long-term energy cost volatility and carbon exposure, improving operating predictability and permitting prospects. This structural shift supports lower operating costs, ESG credentials, and de-risking of future project approvals and financing.
Negative Factors
Material free cash flow decline
A steep fall in free cash flow signals weaker internal funding for sustaining capex and growth, increasing reliance on liquidity or external financing. Persistently weak cash conversion reduces margin for investment, dividends, or debt reduction over the medium term.
Operational constraints at QB
Ongoing tailings development that reduces throughput and raises unit costs is a structural operational risk until resolved. Prolonged constraints at a major asset can depress segment output, impair margins, and delay return on capital from QB for multiple quarters to years.
Low return on equity
A sub-5% ROE indicates limited efficiency in converting equity into profit versus capital-employed peers. Over time, persistently low ROE can signal suboptimal asset returns or capital allocation, constraining shareholder value creation despite scale and improved margins.
Teck Resources (TECK.B) vs. iShares MSCI Canada ETF (EWC)
Market Cap
$33.68B
Dividend Yield0.78%
Average Volume (3M)963.23K
Price to Earnings (P/E)28.4
Beta (1Y)1.89
Revenue Growth-29.29%
EPS Growth178.41%
CountryCA
Employees7,200
SectorBasic Materials
Sector Strength58
IndustryIndustrial Materials
Share Statistics
EPS (TTM)0.76
Shares Outstanding480,624,400
10 Day Avg. Volume825,655
30 Day Avg. Volume963,228
Financial Highlights & Ratios
PEG Ratio-0.89
Price to Book (P/B)1.15
Price to Sales (P/S)3.32
P/FCF Ratio194.18
Enterprise Value/Market Cap1.06
Enterprise Value/Revenue3.40
Enterprise Value/Gross Profit16.14
Enterprise Value/Ebitda9.38
Forecast
1Y Price Target
$63.74Price Target Upside-9.14% Downside
Rating ConsensusHold
Number of Analyst Covering6
EPS Forecast (FY)2.72
Revenue Forecast (FY)$11.31B
Teck Resources Business Overview & Revenue Model
Company DescriptionTeck 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 MoneyTeck Resources generates revenue primarily through the sale of its core products: copper, zinc, and metallurgical coal. The company sells these materials to customers in various sectors, including construction, manufacturing, and energy. Revenue is largely driven by global commodity prices, which can fluctuate based on market demand, geopolitical factors, and economic conditions. Additionally, Teck has established significant partnerships and joint ventures that enhance its operational efficiencies and expand its market reach. The company is also investing in growth opportunities, including exploration and development of new mining projects, which may contribute to future revenue streams. The diversification of its product offerings and its commitment to sustainable practices further support its financial performance and resilience in changing market conditions.
Teck Resources Earnings Call Summary
Earnings Call Date:Oct 22, 2025
(Q3-2025)
| % Change Since: |
Next Earnings Date:Feb 18, 2026
Earnings Call Sentiment Positive
The call highlighted positive developments such as the merger with Anglo American, improved financial performance, safety, and sustainability achievements. However, challenges at QB operations and the suspension of share buybacks presented some hurdles.Q3-2025 Updates
Positive Updates
Merger with Anglo American
A merger of equals agreement with Anglo American was announced, creating a global leader in critical minerals and a top five copper producer. The merger is expected to produce 175,000 tons of incremental copper and generate an annual average underlying EBITDA uplift of at least $1.4 billion per year for at least twenty years.
Operational Review and Improvements
Completion of a comprehensive operational review focused on improving performance with a detailed QB action plan. Safety performance improved with a high potential incident frequency rate of 0.06, trending 50% below the annual rate last year.
Financial Performance
Adjusted EBITDA increased by 18% compared to the previous year, reaching $1.2 billion driven by higher base metals prices and lower smelter processing charges.
Strong Zinc Segment Performance
Gross profit before depreciation in the zinc segment improved 27% compared to the previous year. Red Dog zinc sales exceeded guidance and anticipated high end of production guidance.
Renewable Energy Transition
Chilean operations reached 100% renewable power on October 1, following the implementation of a long-term Clean Power Agreement for QB's electricity supply.
Negative Updates
Challenges in QB Operations
QB production was constrained due to ongoing tailings management facility development work, impacting mill utilization and leading to higher operating costs.
Share Buyback Suspension
While $144 million in share buybacks were completed in July, further buybacks will not be permitted through the closing of the proposed merger with Anglo American.
Company Guidance
In the third quarter of 2025, Teck Resources Limited announced significant developments, including a merger of equals with Anglo American, forming Anglo Tech, which is set to become a leading global copper producer with over 1.2 million tons of annual production. The merger is expected to generate $1.4 billion in annual EBITDA uplift and $800 million in recurring annual synergies. Teck Resources reported a 23% increase in gross profit before depreciation and amortization from its copper segment, totaling $740 million, and a 27% increase in its zinc segment, totaling $454 million, compared to the same period last year. The company's adjusted EBITDA increased by 18% to $1.2 billion, driven by higher base metals prices and improved operational performance. Teck Resources also maintained a strong balance sheet with $9.5 billion in liquidity and $5.3 billion in cash. The company highlighted a 50% year-over-year improvement in its high potential incident frequency rate and celebrated its Chilean operations reaching 100% renewable power. Additionally, the Board approved the Highland Valley mine life extension, ensuring production until 2046.Teck Resources Financial Statement Overview
Summary
Teck Resources shows a recovery in revenue and profitability with improved margins. However, operational efficiency and cash flow management remain concerns, and there is potential for enhancing return on equity.Income Statement
Teck Resources shows a positive revenue growth rate of 5.29% in the TTM, indicating a recovery from previous declines. The gross profit margin improved to 21.07%, and the net profit margin increased to 11.98%, reflecting enhanced profitability. However, the EBIT and EBITDA margins have decreased compared to previous years, suggesting potential operational challenges.Balance Sheet
The company's debt-to-equity ratio remains stable at 0.39, indicating moderate leverage. Return on equity is relatively low at 4.96%, suggesting limited efficiency in generating returns from equity. The equity ratio stands at 55.94%, reflecting a solid equity base. Overall, the balance sheet is stable but shows room for improvement in profitability.Cash Flow
Teck Resources faces challenges in cash flow management, with a significant decline in free cash flow growth rate (-69.96%) in the TTM. The operating cash flow to net income ratio is 0.40, indicating moderate cash flow generation relative to net income. The negative free cash flow to net income ratio highlights potential liquidity concerns.| Breakdown | TTM | Dec 2024 | Dec 2023 | Dec 2022 | Dec 2021 | Dec 2020 |
|---|---|---|---|---|---|---|
Income Statement | ||||||
| Total Revenue | 10.48B | 9.06B | 15.01B | 17.32B | 13.48B | 8.95B |
| Gross Profit | 2.21B | 1.61B | 5.14B | 8.57B | 5.08B | 1.33B |
| EBITDA | 3.80B | 1.92B | 5.97B | 8.44B | 6.37B | 648.00M |
| Net Income | 1.26B | 406.00M | 2.41B | 3.32B | 2.87B | -944.00M |
Balance Sheet | ||||||
| Total Assets | 44.55B | 47.04B | 56.19B | 52.36B | 47.37B | 41.28B |
| Cash, Cash Equivalents and Short-Term Investments | 4.76B | 7.59B | 744.00M | 1.88B | 1.43B | 450.00M |
| Total Debt | 9.65B | 9.96B | 11.09B | 10.02B | 9.33B | 7.88B |
| Total Liabilities | 18.68B | 19.94B | 27.90B | 25.85B | 23.59B | 20.57B |
| Stockholders Equity | 24.92B | 26.08B | 26.99B | 25.47B | 23.00B | 20.04B |
Cash Flow | ||||||
| Free Cash Flow | -280.00M | 155.00M | -1.70B | 2.52B | 25.00M | -2.06B |
| Operating Cash Flow | 1.51B | 2.79B | 4.08B | 7.98B | 4.74B | 1.56B |
| Investing Cash Flow | -1.80B | 6.17B | -4.76B | -5.68B | -4.82B | -3.67B |
| Financing Cash Flow | -2.44B | -2.56B | -469.00M | -1.99B | 1.06B | 1.53B |
Teck Resources Technical Analysis
Positive
70.15
Price Trends
61.33
Positive
58.09
Positive
53.86
Positive
Market Momentum
2.52
Negative
69.22
Neutral
66.28
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 70.15 is above the 20-day moving average (MA) of 64.67, above the 50-day MA of 61.33, and above the 200-day MA of 53.86, indicating a bullish trend. The MACD of 2.52 indicates Negative momentum. The RSI at 69.22 is Neutral, neither overbought nor oversold. The STOCH value of 66.28 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
UnderperformOutperform
Sector (61)
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
82 Outperform | C$1.61B | 9.66 | 33.87% | 9.17% | 34.89% | 67.31% | |
66 Neutral | $33.68B | 28.44 | 4.88% | 0.78% | -29.29% | 178.41% | |
61 Neutral | $10.43B | 7.12 | -0.05% | 2.87% | 2.86% | -36.73% | |
60 Neutral | C$23.04B | 52.40 | 5.71% | ― | ― | 97.71% | |
53 Neutral | C$4.31B | -35.41 | -131.76% | ― | ― | 44.04% | |
52 Neutral | $2.10B | -5.60 | -42.69% | ― | ― | -465.27% | |
51 Neutral | C$3.04B | -24.35 | -57.75% | ― | 7.50% | -508.68% |
* Basic Materials Sector Average
TSE:TECK.B
Teck Resources
70.15
9.66
15.96%
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Glossary
BuyA stock rated as a "Buy" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock is likely to deliver higher returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
HoldA stock rated as a "Hold" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly compelling nor unfavorable for investment. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
SellA stock rated as a "Sell" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock may deliver lower returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
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.