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Teck Resources: Analyst Ratings and Fundamental Analysis

Stock Target Advisor News - Stock Target Advisor - Mon Jul 15, 11:16PM CDT

Teck Resources (TECK-B:CA)

Teck Resources Limited has received updated research reports with notable upgrades in their target prices and positive outlooks on the stock.

Recent Analyst Ratings

Scotia Capital and National Bank Financial have both raised their target prices for Teck Resources Limited:

Scotia Capital (Analyst Rank#8): Upgraded the target price to CAD 85 from CAD 80, maintaining an Outperform rating.
National Bank Financial (Analyst Rank#21): Increased the target price to CAD 86 from CAD 81, also maintaining an Outperform rating.

These upgrades reflect the analysts’ confidence in Teck Resources’ future performance, driven by the company’s strategic initiatives and robust financial health.

Average Analyst Target Price

Based on the stock forecasts from 13 analysts, the average target price for Teck Resources Limited is CAD 67.97 over the next 12 months. The consensus analyst rating for the stock is Buy.

Stock Target Advisor’s Analysis

Stock Target Advisor provides a Slightly Bullish outlook on Teck Resources Limited, based on 9 positive signals and 5 negative signals. Here’s a detailed breakdown of what analysts like and dislike about the stock:

Positive Fundamentals:

Low Volatility: Teck Resources’ annual returns have been stable and consistent compared to its sector peers, ranking in the top quartile.

Superior Risk-Adjusted Returns: The stock has performed well on a risk-adjusted basis, outperforming its sector peers.

Positive Cash Flow: The company reported positive total cash flow in the most recent four quarters.

Positive Free Cash Flow: Teck Resources had positive free cash flow in the most recent four quarters.

Superior Return on Assets: Management has delivered better return on assets than peers in the recent four quarters.

Superior Capital Utilization: The company’s return on invested capital is higher than its peers.

High Market Capitalization: Being one of the largest entities in its sector, Teck Resources is among the top quartile in terms of market capitalization.

High Gross Profit to Asset Ratio: The stock ranks in the top quartile compared to peers, indicating superior long-term returns.

Superior Return on Equity: Management has delivered better return on equity than peers in the most recent four quarters.

Negative Fundamentals

Overpriced Compared to Earnings: The stock trades high relative to its peers on a price-to-earnings basis.

Overpriced on Cash Flow Basis: The stock is priced above the sector median on a price-to-cash flow basis.

Low Earnings Growth: Teck Resources has shown below-median earnings growth over the past five years.

Highly Leveraged: The company has a high debt-to-equity ratio compared to its sector peers.

Overpriced on Free Cash Flow Basis: The stock trades above the median for its sector on a price-to-free cash flow basis.

Recent Stock Performance

At the last closing, Teck Resources Limited’s stock price was CAD 69.23. Over the past week, the stock price has changed by +0.71%, +5.52% over the past month, and +26.10% over the past year.

Final Analysis

Teck Resources Limited has shown strong financial performance and stability, leading to positive revisions in analyst target prices. However, the stock’s valuation metrics indicate it may be overpriced compared to its peers, particularly on earnings, cash flow, and free cash flow bases. Investors should weigh these factors, considering both the stock’s robust performance and potential valuation concerns, before making investment decisions. The company’s high leverage and below-median earnings growth also warrant caution.

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