Analyst Actions: Teck Resources Maintains Outperform Rating Based on Long-Term Growth Profile

By Staff,

Shutterstock photo

Teck Resources Ltd. (TCKb.TO)


R. Profiti

CP: C$ 26.96

TP: C$ 37

CAP: C$ 15.9b

1 416 352 4563

Coking coal outlook: Stuck in surplus

Event: The Credit Suisse Global Commodities Research Team has updated its commodity price forecasts. For full details, see the full report titled "Commodities Forecasts: The Setting of the Sun..." dated April 3, 2013.

Impact: Neutral. Our Commodities Team views coking coal markets as well supplied for at least the next two years and we consequently doubt the potential for hard coking coal ( HCC ) prices to climb back above C$200/t for some time. However, HCC contract prices should offer some degree of outperformance as it represents a willingness to secure a premium product at a premium price.

Catalysts: TCK will report 1Q13 results on April 23rd. Our FY13/14/15 EPS revisions reflect recent changes to our to our coal and metals price forecasts.

Valuation: We continue to rate TCK Outperform based on its long-term growth profile in coal, copper, and undervalued energy business, as well as its relatively low jurisdictional risk profile, and strong balance sheet. TCK currently trades at P/NAV of 0.72x (vs. peer group of 0.67x) and FY13/14 EV/EBTIDA of 6.9/5.6x (vs. peer group average of 8.7/6x). Our TP of C$37 is based on a 50/50 weighting of 1x our NAVPS (C$38.81/share) and 6x FY14 EV/EBITDA.

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

Copyright (C) 2014 All rights reserved. Unauthorized reproduction is strictly prohibited.

This article appears in: Investing Commodities
Referenced Stocks: HCC

More from MT Newswires


MT Newswires

MT Newswires

Follow on:

Find a Credit Card

Select a credit card product by:
Select an offer:
Data Provided by