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Do Analysts See Value in Turquoise Hill Resources?

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Nov. 20 2020, Updated 3:33 p.m. ET

Analyst outlook

So far in this series, we’ve looked at analyst ratings and target prices for Freeport-McMoRan (FCX), Teck Resources (TCK), and Southern Copper (SCCO). In this final part of the series, we’ll see how analysts are rating Turquoise Hill Resources (TRQ) (RIO).

According to the consensus estimates compiled by Thomson Reuters, TRQ has a mean one-year price target of 5.68 Canadian dollars (~$4.28), representing a 24.3% upside over its closing price on January 20.

Of the six analysts surveyed by Thomson Reuters, one analyst has recommended the stock as a “strong buy,” while two have recommended it as a “buy.” The remaining three analysts have given “hold” recommendations on the stock.

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4Q16 production data

TRQ released its 4Q16 production data on January 16. The company sold 37, 600 metric tons of copper that quarter. In fiscal 2016, TRQ sold 188,000 metric tons of copper, as compared to 201,000 metric tons of copper in fiscal 2015. The company expects to produce between 130,000–160,000 metric tons of copper in 2017.

Earnings estimates

Analysts expect Turquoise Hill Resources to post revenue of $213 million in 4Q16. The company posted revenue of $355 million in 4Q15 and $226 million in 3Q16.

TRQ is expected to post EPS of -$0.01 in 4Q16, as compared to EPS of -$0.02 in 3Q16.

It’s important to note that Turquoise Hill Resources is in the process of converting its Oyu Tolgoi mine to underground operations. This work at Oyu Tolgoi will take more than a decade, and the company’s copper production could start to gain traction toward the end of this decade. Notably, Turquoise Hill Resources is a long-term play on copper prices and Chinese copper demand.

Keep visiting Market Realist’s Copper page for ongoing updates on this industry.

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