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How Are Analysts Seeing Teck Resources before Its 4Q16 Earnings?

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Teck Resources

Teck Resources (TCK) is expected to release its 4Q16 earnings on February 15. The stock gained ~550% in 2016. Teck’s strong performance dwarfed the modest gains registered by mining giants (XME) like Rio Tinto (RIO) (TRQ) and BHP Billiton (BHP).

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Analyst ratings

According to consensus estimates compiled by Thomson Reuters, Teck Resources has a mean one-year price target of 34.20 Canadian dollars (~$25.7), which is close to its closing price on January 20. Of the 19 analysts surveyed by Thomson Reuters, four have recommended the stock as a “strong buy,” while nine have recommended it as a “buy.” Two analysts have recommended Teck Resources as a “sell” or equivalent, and the remaining four analysts have recommended a “hold” on the stock.

4Q16 earnings estimates

Analysts expect Teck Resources to post revenue of 3.3 billion Canadian dollars (~$2.5 billion) in 4Q16. By contrast, TCK posted revenue of 2.1 billion Canadian dollars (~$1.6 billion) in 4Q15 and 2.3 billion Canadian dollars (~$1.7 billion) in 3Q16.

According to data compiled by Thomson Reuters, analysts expect Teck Resources to post EBITDA (earnings before interest, tax, depreciation, and amortization) of 1.7 billion Canadian dollars (~$1.3 billion) in 4Q16. The company posted EBITDA of 0.47 billion Canadian dollars (~$0.35 billion) in 4Q15 and 0.69 billion Canadian dollars (~$0.5 billion) in 3Q16.

Key drivers

We should note that along with copper, Teck Resources also sells steelmaking coal and zinc. Along with higher copper and zinc prices, Teck Resources’ 4Q16 earnings would be positively impacted by the steep rise in coking coal prices.

In the next and final part of the series, we’ll see how analysts are rating Turquoise Hill Resources (TRQ).

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