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Analysts’ Views: How Much Upside Does Teck Resources Have?


Jun. 26 2017, Updated 5:36 p.m. ET

Analysts’ views

Teck Resources (TECK), a Canadian-based diversified miner (EWC), is having a dismal 2017. Based on its June 23, 2017, closing price, the stock has fallen 17.4% this year, making it among the worst-performing companies in the metals and mining space (RIO). It marks a reversal of fortunes for Teck Resources as the company was among the biggest gainers last year and saw its market capitalization rise a whopping 418.0%.

The company’s 2017 price action disappointed investors, but let’s see how analysts are rating the stock.

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Teck Resources has received a consensus price target of $35.60 Canadian (~$26.85) from analysts polled by Thomson Reuters. That represents a potential upside of 62.0% over Teck Resources’ June 23, 2017, closing price. Overall, analysts seem bullish on Teck Resources. The stock has received a “buy” or equivalent rating from 18 of the 19 analysts, and one analyst has given it a “hold.” In contrast, Freeport-McMoRan (FCX) and Southern Copper (SCCO) have received “buy” ratings from 16.7% and 21.4% of analysts, respectively.

Key drivers

Teck Resources mainly sells steelmaking coal, copper, and zinc. Commodity prices have been weak in 2Q17 since Trump trade has withered, at least when it comes to the metals and mining sector. Steelmaking coal prices have also shown a weakness amid expectations of a slowdown in Chinese demand growth rates.

Higher coal prices were the key drivers of Teck Resources’ 2016 profitability. Lower coal prices would have a negative impact on Teck Resources’ earnings in the coming quarters. In the next part of this series, we’ll see what analysts are projecting for Teck Resources’ earnings in 2Q17.


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