Teck Resources (TECK.B) AI Stock Analysis

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Teck Resources

(TSX:TECK.B)

Rating:63Neutral

Price Target:

C$53.00

▲( 7.22% Upside)

Teck Resources' overall score reflects a mix of strengths and challenges. Strong revenue growth, operational efficiency, and a solid balance sheet are positives, but concerns over profitability margins, cash flow issues, and high valuation weigh on the score. The recent earnings call provided a boost, highlighting profitability improvements and operational milestones, despite ongoing challenges.

Positive Factors

Earnings

Teck Resources reported significantly better-than-expected performance due to operational improvements and good performance at key assets.

Growth Projects

Copper growth projects, including QB debottlenecking and optimization, are progressing well.

Shareholder Returns

Teck's strong balance sheet and ongoing capital returns make it an attractive investment.

Negative Factors

Operational Challenges

Production was negatively impacted by extended maintenance outages, challenging weather, and a nationwide power outage, leading to delays in the required lifts for the development of the Tailings Management Facility.

Production Guidance

There is a heightened risk of an eventual cut to QB2 guidance, which could remain a near-term overhang.

Production Guidance Revisions

The track record of negative revisions to production guidance for Teck has been unhelpful.

Teck Resources (TECK.B) vs. iShares MSCI Canada ETF (EWC)

Market Cap

$24.92B

Dividend Yield1%

Average Volume (3M)1.46M

Price to Earnings (P/E)70.1

Beta (1Y)1.73

Revenue Growth-22.39%

EPS Growth-77.05%

CountryCA

Employees7,200

SectorBasic Materials

Sector Strength60

IndustryIndustrial Materials

Share Statistics

EPS (TTM)0.60

Shares Outstanding490,400,000

10 Day Avg. Volume1,309,292

30 Day Avg. Volume1,455,787

Financial Highlights & Ratios

PEG Ratio5.72

Price to Book (P/B)0.97

Price to Sales (P/S)0.00

P/FCF Ratio-29.62

Enterprise Value/Market CapN/A

Enterprise Value/RevenueN/A

Enterprise Value/Gross ProfitN/A

Enterprise Value/EbitdaN/A

Forecast

1Y Price Target

$64.67

Price Target Upside30.84% Upside

Rating ConsensusStrong Buy

Number of Analyst Covering14

Teck Resources Business Overview & Revenue Model

Company DescriptionTeck Resources Limited (TECK.B) is a diversified natural resources company headquartered in Vancouver, Canada. It is engaged in mining and mineral development with operations and projects in Canada, the United States, Chile, and Peru. The company primarily produces steelmaking coal, copper, and zinc, and it also has investments in energy assets. Teck Resources is committed to responsible mining practices and sustainable resource development.

How the Company Makes MoneyTeck Resources generates revenue through the extraction, production, and sale of natural resources, primarily focusing on steelmaking coal, copper, and zinc. The company's revenue model involves mining these raw materials from its various operations and selling them to industrial customers worldwide. Steelmaking coal, used in the production of steel, remains a significant contributor to its earnings. Copper, essential for electrical applications and infrastructure, and zinc, used for galvanization and other industrial purposes, also form substantial parts of its revenue streams. Teck Resources' earnings are influenced by commodity prices, production volumes, and operational efficiencies. Additionally, the company benefits from strategic partnerships and joint ventures in certain projects, which can enhance its production capacity and market reach.

Teck Resources Financial Statement Overview

Summary

Teck Resources demonstrates strong revenue growth and operational efficiency. However, profitability margins and cash flow generation are concerning. The balance sheet shows low leverage, providing stability, but liquidity issues need to be addressed.

Income Statement

Positive

Teck Resources shows a mixed performance in its income statement. The TTM data indicates a gross profit margin of 22.37%, a net profit margin of 3.67%, and an EBIT margin of 9.48%. These margins suggest moderate profitability. However, the revenue growth rate from 2024 to TTM is a robust 30.23%, highlighting significant revenue expansion after a downturn in 2024. The EBITDA margin at 30.62% is strong, indicating efficient operations despite the challenges faced. While the revenue trajectory is positive, net income fluctuations and declining margins from earlier years present a concern for profitability stability.

Balance Sheet

Positive

The balance sheet of Teck Resources is relatively strong. The debt-to-equity ratio stands at 0.38, reflecting a conservative use of leverage. The TTM return on equity is 1.68%, indicating modest returns on shareholders' equity. The equity ratio is 56.28%, suggesting a strong reliance on equity financing and a solid financial foundation. The stability in equity position and manageable debt levels are positives, though ROE could be improved for better shareholder returns.

Cash Flow

Neutral

Teck Resources' cash flow performance is mixed. The operating cash flow to net income ratio is 4.38, showcasing strong cash generation relative to net income. However, the free cash flow to net income ratio is negative, indicating challenges in maintaining free cash flow after capital expenditures. The free cash flow growth rate from 2024 to TTM is concerning at -643.23%, pointing to significant cash flow difficulties. The robust operating cash flow is a positive, but negative free cash flows highlight potential liquidity issues.

TTM	Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Breakdown
Income Statement		Total Revenue
11.81B	9.06B	15.01B	17.32B	13.48B	8.95B
	Gross Profit
2.64B	1.61B	5.14B	8.57B	5.08B	1.33B
	EBIT
1.12B	-9.00M	4.12B	6.99B	4.85B	438.00M
	EBITDA
3.62B	1.78B	6.15B	8.44B	6.37B	648.00M
	Net Income Common Stockholders
433.00M	406.00M	2.41B	3.32B	2.87B	-944.00M
Balance Sheet		Cash, Cash Equivalents and Short-Term Investments
6.21B	7.59B	744.00M	1.88B	1.43B	450.00M
	Total Assets
45.89B	47.04B	56.19B	52.36B	47.37B	41.28B
	Total Debt
9.93B	9.96B	11.09B	10.02B	9.33B	7.88B
	Net Debt
3.72B	2.38B	10.35B	8.13B	7.90B	7.43B
	Total Liabilities
18.93B	19.94B	27.90B	25.85B	23.59B	20.57B
	Stockholders Equity
25.82B	26.08B	26.99B	25.47B	23.00B	20.04B
Cash Flow		Free Cash Flow
-842.00M	155.00M	-1.70B	2.52B	25.00M	-2.06B
	Operating Cash Flow
1.90B	2.79B	4.08B	7.98B	4.74B	1.56B
	Investing Cash Flow
7.04B	6.17B	-4.76B	-5.68B	-4.82B	-3.67B
	Financing Cash Flow
-4.43B	-2.56B	-469.00M	-1.99B	1.06B	1.53B

Teck Resources Technical Analysis

Technical Analysis Sentiment

Negative

Last Price49.43

Price Trends

50DMA

51.23

Negative

100DMA

55.51

Negative

200DMA

60.13

Negative

Market Momentum

MACD

0.14

Negative

RSI

48.56

Neutral

STOCH

40.42

Neutral

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For TSE:TECK.B, the sentiment is Negative. The current price of 49.43 is above the 20-day moving average (MA) of 49.41, below the 50-day MA of 51.23, and below the 200-day MA of 60.13, indicating a neutral trend. The MACD of 0.14 indicates Negative momentum. The RSI at 48.56 is Neutral, neither overbought nor oversold. The STOCH value of 40.42 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for TSE:TECK.B.

Teck Resources Peers Comparison

Overall Rating

UnderperformOutperform

Sector (50)

Financial Indicators

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
AFM	77 Outperform	C$1.16B	8.06	29.84%	9.89%	76.60%	107.92%
ALS	70 Outperform	C$1.23B	12.04	19.46%	1.35%	-16.14%	1038.04%
IVN	69 Neutral	$18.68B	29.65	9.67%	―	―	137.28%
TECK.B	63 Neutral	$24.92B	70.13	1.32%	1.00%	-22.39%	-77.05%
TECK.A	60 Neutral	C$24.82B	68.69	1.40%	1.02%	-22.39%	-77.05%
SKE	52 Neutral	C$1.97B	―	-137.38%	―	―	-19.29%
Sector *	50 Neutral	$2.00B	-1.02	-21.34%	3.70%	2.00%	-30.65%

* Basic Materials Sector Average

Performance Comparison

TSE:TECK.B

Teck Resources

49.43

-18.89

-27.65%

TSE:IVN

Ivanhoe Mines

13.20

-6.19

-31.92%

TSE:TECK.A

Teck Resources

49.50

-18.70

-27.42%

TSE:AFM

Alphamin Resources

0.94

-0.11

-10.48%

TSE:SKE

Skeena Resources

17.58

11.10

171.30%

TSE:ALS

Altius Minerals

27.70

5.98

27.53%

Teck Resources Earnings Call Summary

Earnings Call Date:Apr 24, 2025

(Q1-2025)

% Change Since: 2.19%|

Next Earnings Date:Jul 24, 2025

Earnings Call Sentiment Neutral

Teck Resources reported strong financial performance with increased EBITDA and successful project milestones, indicating resilience and effective operational strategies. However, challenges such as production impacts at QB, geopolitical risks, and a safety incident at Antamina present ongoing challenges. The company maintains a strong balance sheet and continues to return value to shareholders.

Q1-2025 Updates

Positive Updates

Significant Increase in Adjusted EBITDA

Adjusted EBITDA more than doubled to $927 million, driven by higher commodity prices and increased copper sales volumes.

Strong Operational Performance

Key operations such as Highland Valley, Carmen de Andacollo, and Trail saw strong profit due to successful initiatives to improve profitability and cash flow generation.

Completion of QB Project Finance Testing

QB successfully achieved completion testing requirements under the $2.5 billion USD project finance facility, providing confidence in ramp-up to steady state by year-end.

Increased Copper Production and Improved Margins

Copper production increased by 7% to 106,000 tons, with a net cash unit cost improvement of 32 cents US per pound to $2.04 US per pound.

Robust Balance Sheet

The company maintained a strong balance sheet with a net cash position of $764 million and liquidity of $10 billion.

Return of Cash to Shareholders

$568 million returned to shareholders year-to-date through share buybacks and dividends.

Negative Updates

Production Challenges at QB

QB production was impacted by extended shutdowns, a nationwide power outage, and challenging weather, impacting the rate of material movement for tailings lifts.

Geopolitical Risks and Trade Challenges

Potential impact from tariffs and retaliatory trade measures, particularly affecting sales of Red Dog concentrate to China, representing less than 20% of zinc and lead concentrate sales.

Fatality at Antamina

A fatality occurred at Antamina, where Teck holds a non-operating interest, highlighting ongoing safety challenges.

Company Guidance

During the first quarter of 2025, Teck Resources Limited reported significant improvements in profitability, driven by higher commodity prices and increased sales volumes. Their adjusted EBITDA more than doubled to $927 million, while copper production increased by 7% and copper sales volumes rose by 11% compared to the previous year. The company maintained a strong balance sheet with a net cash position of $764 million and liquidity of $10 billion. Teck continued to return cash to shareholders, with $568 million distributed year-to-date through dividends and share buybacks. The company also achieved significant milestones, including completion testing requirements for the $2.5 billion QB project finance facility, despite facing operational challenges such as a nationwide power outage in Chile. Teck's annual guidance remains unchanged, with expectations for copper production to grow to between 490,000 and 565,000 tons for the full year.

Glossary

OutperformA stock rated as "Outperform" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock is likely to deliver higher returns compared to the average returns of other stocks in the same sector or market index. Investors might consider this stock a good buying opportunity.

NeutralA stock rated as "Neutral" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly attractive nor unattractive for investment. Investors may consider holding onto the stock, as it is not expected to either significantly outperform or underperform the market.

UnderperformA stock rated as "Underperform" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock may deliver lower returns compared to the average returns of other stocks in the same sector or market index. Investors might consider selling the stock or avoiding it as an investment.

Disclaimer

This AI Analyst Stock Report is automatically generated by our AI systems using advanced algorithms and publicly available financial, technical, and market data. While the information provided aims to be accurate and insightful, it is intended for informational purposes only and should not be considered financial advice. Any content created by an AI (Artificial Intelligence) system may contain inaccuracies and/or contain errors. Investing in stocks carries inherent risks, and past performance is not indicative of future results. This report does not account for your personal financial circumstances, objectives, or risk tolerance. Always conduct your own research or consult with a qualified financial advisor before making investment decisions. The analysis and recommendations provided are based on historical and current data and may not fully reflect future market conditions or unexpected developments. Neither the creators of this report nor its affiliated entities guarantee the accuracy, completeness, or reliability of the information presented. Use this report at your own discretion and risk.