Analysts seem to be feeling optimistic about Teck Resources (TECK.B – Research Report) lately, with another positive rating update this time from B.Riley FBR. Analyst Lucas Pipes remains bullish on the stock and has a C$49 price target.
“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 C$1.2B ($800M earn-in contribution and C$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.
Currently, the analyst consensus on Teck Resources is a Strong Buy with an average price target of C$44.71, which is a 56.3% upside from current levels. In a report released yesterday, TD Securities also upgraded the stock to Buy with a C$45 price target.
Based on Teck Resources’ latest earnings release for the quarter ending September 30, the company reported a quarterly revenue of C$3.21 billion and net profit of C$1.28 billion. In comparison, last year the company earned revenue of C$3.13 billion and had a net profit of C$600 million.
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.
The company’s shares closed on Thursday at C$28.61.