Teck Resources LimitedNYSE
Teck Resources: This Time Is Different
Dan Stringer • 44 Comments
Dan Stringer • 44 Comments
Mon, Dec. 5, 1:57 PM
- Teck Resources (TCK +2.3%) is upgraded to Buy from Neutral with a $40 price target, raised from $30, at Citigroup, which cites a significantly improved outlook for met coal prices in 2017.
- Citi also raises its free cash flow projection for TCK to 22% if spot prices can hold out longer than expected, saying the company is "entering a cash flow ‘harvesting’ mode, with investment spending to complete Fort Hills rolling off in 2017."
- Separately, Teck is changing its NYSE ticker symbol to TECK, effective today.
- At the same time, Alcoa (AA +7.5%) powers higher even as Citi downgrades shares to Neutral from Buy with a $32 price target, saying the risk/reward is now evenly balanced following the stock's 35% run since Nov. 1 and the balance of risk on aluminum prices is on the downside with China set to add capacity in 2017.
Mon, Nov. 28, 10:59 AM
- Higher metallurgical coal prices prompt CIBC World Markets to raise its stock price target for Teck Resources (TCK +2.7%) to C$44 from C$33 while maintaining a Sector Outperform rating, and lift its 2017 cash flow per share forecast for TCK to $8.76 from $5.44.
- TCK last week updated its Q4 realized price expectations for all steelmaking coal productsl, raising its outlook to US$200-$205/metric ton from earlier guidance of ~US$185/ton.
- CIBC believe the revision is consistent with the application of historical quality-related price spreads, and that it looks appropriate given TCK’s sale mix of 60% contract and 40% market-related prices.
Wed, Nov. 23, 11:40 AM
Thu, Nov. 17, 12:45 PM
- Teck Resources (TCK +0.3%) hits a 52-week high as Barclays upgrades shares to Overweight from Underweight, as the backdrop for commodities and commodities-related stocks quickly changes.
- Barclays notes TCK had an enormous run this year even before met coal started to move as fears faded that base metal and bulk commodity producers would disappear under the pressure of low commodity prices.
- The firm thinks there's still meaningful upside for TCK based on potentially "transformative" near-term cash flow generation, with potential for much more as investors respond to changes in the macro environment that could help make mining stocks more attractive than at any time in for years.
Thu, Nov. 17, 12:18 PM
- In no surprise, the list is dominated by the ripping financial sector:
- Allstate (ALL +1.4%)
- Ameriprise (AMP +0.2%)
- TD Ameritrade (AMTD +1.6%)
- BB&T (BBT +2.1%)
- Citigroup (C +2.4%)
- Citizens Financial (CFG +2%)
- Comerica (CMA +1.5%)
- CNA Financial (CNA +0.6%)
- Loews Corp. (L +0.9%)
- Marsh & McLennan (MMC +1.9%)
- PNC Financial (PNC +2.6%)
- Royal Bank of Canada (RY +0.7%)
- U.S. Bancorp (USB +1.9%)
- Aetna (AET +1.5%)
- Best Buy (BBY +10.4%)
- CBS (CBS +0.6%)
- Celanese (CE +0.1%)
- Comcast (CMCSA +1.5%)
- Dell Technologies (DVMT +1.1%)
- The Gap (GPS +0.4%)
- Humana (HUM +1.4%)
- KLA-Tencor (KLAC +2.7%)
- Liberty Media (LMCA +1.6%)
- Lam Research (LRCX +1.9%)
- Micron (MU +5.3%)
- Nvidia (NVDA +2.7%)
- Rockwell (ROK -0.5%)
- Teck Resources (TCK +0.5%)
- Texas Instruments (TXN +1.1%)
- New lows:
- Novo Nordisk (NVO +0.3%)
Tue, Nov. 15, 1:55 PM
- Teck Resources (TCK +1.1%) is upgraded to Buy from Neutral with a $31 price target at Goldman Sachs, which also raises its 2017 average price forecast for coking coal - doubling its previous forecast to $274/ton from $135 - and copper.
- Goldman believes TCK’s 95% exposure to coking coal and zinc has the company well-positioned to benefit from strength in the two subsectors; the firm also lifts its 2017 EPS estimate for TCK by 57%.
- TCK should be able to take advantage of the current favorable pricing environment to further bolster its balance sheet, fund any accretive organic growth opportunities, and potentially revisit its dividend policy, Goldman says.
Mon, Nov. 7, 2:42 PM
- Teck Resources (TCK +3.2%) is initiated with a Neutral rating and a $30 price target at Citigroup, which cites its expectation for a drop in prices for steelmaking coal as China eases its production policy and additional supply enters the market via the U.S. and Australia.
- Citi sees TCK realizing a significant and immediate cash windfall due to a recent surge in the price of met coal to a Q4 benchmark price of $200/metric ton, but the firm forecasts a drop in the average met coal price to $134/ton next year.
Thu, Oct. 27, 2:56 PM
- Teck Resources (TCK -0.4%) is slightly lower despite reporting significantly higher than expected Q3 revenues and raising its production forecast for the year.
- TCK, the largest producer of steel-making coal in North America, expects FY 2016 production at 27M-27.5M metric tons, compared with its previous forecast of 26M-27M metric tons, with sales at or above 6.5M metric tons in Q4.
- Q3 operating costs fell 7.3% to C$800M, but the company expects unit costs to rise in Q4 as it plans to increase the use of contractors and higher cost equipment to maximize production.
- TCK says construction of the Fort Hills oil sands project in Alberta is more than 70% complete; TCK owns a 20% stake in the 180K bbl/day project, which is majority-owned by Suncor Energy.
Thu, Oct. 27, 5:31 AM
Wed, Oct. 26, 5:30 PM
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Mon, Oct. 17, 11:24 AM
- Teck Resources (TCK +3.8%) jumps to a 52-week high after RBC Capital upgrades shares to Outperform from Sector Perform and raises its price target to $30 from $23, and Credit Suisse upgrades the stock to Outperform from Neutral.
- Although coking coal prices are not likely to maintain all their recent gains, RBC believes TCK will benefit from a significant increase in realized coal prices in Q4 and 2017, with zinc prices also providing additional upside potential.
- “While production should rebound as the disruptions are resolved, we expect supply to remain constrained and for the price to maintain a significant portion of recent gains,” the firm says.
- RBC’s coking coal price forecasts climb to $165/metric ton from $100 for 2017, to $150 from $95 for 2018, and to $120 from $100 for 2019-20; the firm estimates roughly half of TCK’s 2016 revenue comes from coal, and every $20 increase in coking coal prices will boost EPS by $0.67.
Thu, Oct. 13, 12:18 PM
- Iron ore heavyweights Rio Tinto (RIO -3.4%) and BHP Billiton (BHP -3.5%) are sharply lower following the news that Chinese exports fell by a more than expected 10% and imports dropped by a more than anticipated 1.9%.
- Also down substantially are the likes of Freeport McMoRan (FCX -6.5%), U.S. Steel (X -5.7%), Teck Resources (TCK -5.4%), Cliffs Natural Resources (CLF -5%), Anglo American (OTCPK:AAUKF, OTCPK:AAUKY) and Glencore (OTCPK:GLCNF, OTCPK:GLNCY).
- Also, Rio and BHP are downgraded to Sell from Neutral at Citigroup, which cites the impact of slack China commodities demand after the country's monetary stimulus and supply restrictions have driven a surge in bulk prices in 2016.
Mon, Oct. 3, 12:34 PM
- Freeport McMoRan (FCX -0.5%), Barrick Gold (ABX -2.5%) and Pan American Silver (PAAS -0.5%) are upgraded to Buy from Hold at Deutsche Bank, which notes the 12% Q3 rally in commodity prices have enabled the sector to improve their balance sheets via stock issuance, debt refinancing and asset disposals.
- The firm is neutral overall in the metals group, as it continues to believe that material supply cuts still are needed in most commodities and thus does not anticipate prices continuing their upward trend.
- Deutsche Bank says its top picks are ABX and Newmont Mining (NEM -3%) in precious metals, Steel Dynamics (STLD -2.4%) in steel, and Alcoa (AA -1.1%) and Kaiser Aluminum (KALU -1.8%) in aluminum; it upgrades AK Steel (AKS -0.7%), Coeur Mining (CDE -0.8%), Teck Resources (TCK -1.5%) and Goldcorp (GG -4.2%) to Hold from Sell.
Tue, Sep. 27, 6:54 PM
- Teck Resources (NYSE:TCK) wants to regain its investment-grade credit rating but expects it will need to reduce its debt load by $1.5B-$2B to do so, CFO Ron Millos says.
- The CFO says reducing TCK's debt by that margin will take "some time and improvement in commodity prices and proceeds from asset sales."
- TCK has cut its debt to $6.97B at the end of June from $9.6B at the end of 2015, and is working on putting some infrastructure assets, including the Waneta Dam and Ridley coal terminal in British Columbia, into a position to sell if the price is right, Millos says.
- Separately, TCK's VP for investor relations and strategic analysis says prices for coking coal, which have more than doubled this year, could stay high for several more quarters as supply from mines that have restarted take time to reach the market.
Mon, Sep. 26, 3:30 PM
- Teck Resources (TCK +1.7%) says it has requested environmental approval for a phase two expansion project at its Quebrada Blanca copper mine in northern Chile.
- TCK says project optimization work currently underway targets capital costs of $4.5B-$5B with an initial mine life of 25 years, compared with a 2012 feasibility study estimate of $5.6B.
- TCK expects an updated feasibility study, including capital and operating cost estimates for the project, will be completed in Q1 2017, although it does not anticipate reaching a decision on whether to proceed with the project before mid-2018.
Fri, Sep. 23, 2:06 PM