Teck Resources downgraded to Peer Perform from Outperform at Wolfe Research

Wolfe Research analyst Timna Tanners downgraded Teck Resources to Peer Perform from Outperform without a price target. The downgrade reflects lower copper, zinc and met coal forecasts, which shrink the analyst’s 2023 and 2024 EBITDA estimates down to $6.4B and $7.7B, from a prior $7.4B and $8.1B. The firm now forecasts a smaller free cash flow outlook for Teck, which is further burdened by cash tax payments due in Q1 of 2024 as it used up its Canadian carryforward. The shares appear to price in acquisition speculation after Glencore’s hostile offer, yet Wolfe does consider Teck an obvious acquisition candidate, says the analyst.