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Teck Resources Ltd Class B (Sub Voting) TECK

Morningstar Rating
$38.35 +0.89 (2.38%)
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Company Report

Maintaining Teck's Fair Value Estimate at USD 34; Shares Overvalued

China plays a defining role for Teck Resources as the biggest buyer of everything the company digs out of the ground: metallurgical coal, copper, zinc, and lead. With the exception of lead, demand for these commodities is tied to fixed-asset investment. We expect a rebalancing of China's economy from investment to household consumption will mean weaker demand growth for investment-oriented commodities and lower prices than the favorable 2023 levels.

Price vs Fair Value

TECK is trading at a 10% premium.
Price
$37.47
Fair Value
$44.00
Uncertainty
High
1-Star Price
$54.20
5-Star Price
$38.60
Economic Moat
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Capital Allocation
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Bulls Say, Bears Say

Bulls

Emerging-markets demand for steel, producer consolidation and supply discipline and the relative paucity of high-grade metallurgical coal deposits could backstop pricing.

Bears

A slower-growing Chinese steel industry if investment growth in infrastructure and real estate slows and ultimately reverses would likely exert significant downward pressure on metallurgical coal prices.

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News

Trading Information

Previous Close Price
$37.46
Day Range
$37.8338.37
52-Week Range
$32.4949.32
Bid/Ask
$38.32 / $38.35
Market Cap
$19.82 Bil
Volume/Avg
98,124 / 3.6 Mil

Key Statistics

Price/Earnings (Normalized)
9.81
Price/Sales
1.77
Dividend Yield (Trailing)
1.98%
Dividend Yield (Forward)
0.99%
Total Yield
2.70%

Company Profile

Teck is a diversified miner with coal, copper, and zinc operations in Canada, the United States, Chile, and Peru. Metallurgical coal is Teck's primary commodity in terms of EBITDA contribution, followed by copper and zinc. Teck is the world's second-largest exporter of seaborne metallurgical coal and is a top-three zinc miner. Its major new copper mine in Chile at the majority-owned Quebrada Blanca 2, in partnership with Sumitomo, will drive an increase in Teck’s attributable copper production by roughly 80%. Along with a number of additional copper growth options, Teck’s strategy is to rebalance its portfolio to low carbon metals such as copper. It sold its oil sands business in early 2023 and has agreed to sell its coal business, with the deal likely closing in the third quarter of 2024.
Sector
Basic Materials
Industry
Other Industrial Metals & Mining
Stock Style Box
Large Value
Total Number of Employees
12,600

Competitors

Valuation

Metric
TECK
RIO
BHP
Price/Earnings (Normalized)
9.8111.4010.70
Price/Book Value
0.952.513.49
Price/Sales
1.772.482.62
Price/Cash Flow
6.158.106.78
Price/Earnings
TECK
RIO
BHP

Financial Strength

Metric
TECK
RIO
BHP
Quick Ratio
0.501.041.08
Current Ratio
1.101.691.57
Interest Coverage
8.047.59
Quick Ratio
TECK
RIO
BHP

Profitability

Metric
TECK
RIO
BHP
Return on Assets (Normalized)
5.01%11.84%13.90%
Return on Equity (Normalized)
10.24%22.48%31.62%
Return on Invested Capital (Normalized)
7.11%19.38%21.70%
Return on Assets
TECK
RIO
BHP
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