Teck Resources (TECK), the Canada-based diversified miner (EWC), has risen 23.1% so far in 2017. According to data compiled by Thomson Reuters, Teck Resources carries a consensus one-year target price of 34.64 Canadian dollars (~$27.76), which represents 12.6% upside over its closing prices on August 25.
Overall, analysts are bullish on Teck Resources. Of the 19 analysts polled by Thomson Reuters, four rated it as a “strong buy,” 13 rated it as a “buy,” and two rated it as a “hold.” None of the analysts gave Teck Resources a “sell” rating.
We should remember that unlike Freeport-McMoRan (FCX) and Southern Copper (SCCO), that get most of their earnings from copper, Teck Resources’ earnings don’t depend on copper as much. Along with copper, Teck Resources also sells zinc and steelmaking coal.
In 2016, coal operations contributed to almost 45% of Teck Resources’ revenues and made up 54% of its gross profit before depreciation and amortization. Coal operations were the largest contributor to Teck Resources’ 2017 profits.
Steelmaking coal prices have shown strength in the last few months. We have seen a rebound in global steel production, which seems to be supporting coal prices. Global steel production stood at 143.2 million metric tons in July 2017, according to data released by the World Steel Association—6.3% higher compared to July 2016. In the first seven months of 2017, global steel production has risen 4.6%—compared to the same period last year.
In the next part, we’ll see how analysts rate Glencore (GLNCY).