B.Riley FBR Sticks to Its Buy Rating for Teck Resources Limited (TECK)

According to The Fly, in a report released yesterday, Lucas Pipes from B.Riley FBR reiterated a Buy rating on Teck Resources Limited (TECKResearch Report). The company’s shares closed yesterday at $21.39.

Pipes observed:

“On the morning of Resources announced the sale of a 30% interest in S.A (QBSA)—subsidiary of Teck Resources that controls the QB2 development project—to Sumitomo Corporation. In our opinion, the announced transaction is a major positive catalyst for Teck Resources, highlighting a persistent valuation disconnect. Specifically, a number of points stand out. (1) The consideration of $1.2B ($800M earn-in contribution and $400M matching contribution) is far exceeding market expectations (that we believe were nearly half of the contribution). (2) The structure of the deal significantly de-risks the development of in our opinion.”

According to TipRanks.com, Pipes is a 1-star analyst with an average return of -1.5% and a 43.4% success rate. Pipes covers the Basic Materials sector, focusing on stocks such as Peabody Energy Corporation Comm, Novagold Resources Inc New, and Hallador Energy Company.

Teck Resources Limited has an analyst consensus of Strong Buy, with a price target consensus of $30.50, representing a 42.6% upside. In a report released yesterday, TD Securities also upgraded the stock to Buy.

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Based on Teck Resources Limited’s latest earnings release for the quarter ending September 30, the company reported a quarterly net profit of $980 million. In comparison, last year the company had a net profit of $479 million.

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Teck Resources Ltd. is a diversified resource company, which engages in the mining and mineral development of copper, steelmaking coal, zinc, and energy properties. The firm also produces germanium and indium. It opertes through the following business segments: Steelmaking Coal, Copper, Zinc, Energy, and Corporate.

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