Last Update 14 Dec 25

Fair value Increased 0.89%

TECK.B: Anglo Deal, Copper Outlook And Critical Minerals Will Guide Future Performance

Analysts have nudged their fair value estimate for Teck Resources modestly higher to about $62.94 from roughly $62.39, reflecting slightly stronger long term copper price and revenue growth assumptions. These factors offset a marginally higher discount rate and stable profit margin expectations amid a mixed backdrop of recent target cuts and hikes across the Street.

Analyst Commentary

Recent Street research paints a nuanced picture for Teck Resources, with a cluster of target changes and rating shifts highlighting both upside tied to copper leverage and execution risk around the current valuation.

Bullish Takeaways

Bullish analysts have lifted price targets in both Canadian dollar and U.S. dollar terms, signaling confidence that stronger long term copper pricing can support higher intrinsic value over the next several years.
The move by JPMorgan to raise its December 2026 target reflects a view that structurally higher copper and gold assumptions can underpin earnings growth and justify a richer multiple versus prior cycles.
Upward revisions to copper price forecasts, including expectations for $12,000 per ton in 2026, point to a supportive demand backdrop that could enhance Teck Resources free cash flow profile and balance sheet flexibility.
Target hikes that accompany rating downgrades indicate that some analysts still see valuation upside on a fundamental basis, even as they temper expectations for near term outperformance relative to peers.

Bearish Takeaways

Several bearish analysts have cut ratings to more neutral stances or outright Sell, signaling concern that the current share price may already discount much of the medium term copper upside and cost improvements.
Sequential reductions in Canadian dollar price targets suggest growing caution on execution risk, including project delivery, capital allocation, and the ability to consistently meet market growth expectations.
Neutral and Hold ratings at higher targets imply that, while long term fundamentals are constructive, risk adjusted returns could lag the broader base metals group if operational or macro headwinds emerge.
The presence of a Sell rating, paired with a relatively conservative target, underscores worries that any disappointment in volumes, costs, or commodity prices could drive multiple compression from current levels.

What's in the News

Anglo American rejected BHP's latest takeover proposal after determining it was not superior to its planned merger of equals with Teck Resources, keeping the Anglo Teck combination as management's preferred path (Bloomberg).
Activist investor Palliser Capital is pressuring Rio Tinto to consider a counterbid for Teck and to restructure its own business, increasing competitive tension around Teck's strategic options (Reuters).
Teck is in talks with the U.S. and Canadian governments to supply key defense related minerals, including germanium, antimony, and gallium, as Western countries seek alternatives to China based supply (Financial Times).
The U.S. government added copper, silver, and metallurgical coal to its critical minerals list, highlighting Teck's role as a significant producer and potentially influencing future trade and tariff policy (Financial Times).
China temporarily suspended export controls on several critical minerals such as gallium and germanium, commodities in which Teck is a notable producer, easing near term supply concerns and underscoring the strategic importance of these materials (New York Times).

Valuation Changes

The fair value estimate has risen slightly to about CA$62.94 from roughly CA$62.39, reflecting modestly stronger long term assumptions.
The discount rate has increased marginally to around 7.87% from about 7.77%, indicating a slightly higher required return on equity.
Revenue growth has edged up to approximately 1.86% from about 1.84%, signaling a small uplift in long term top line expectations.
Net profit margin has slipped fractionally to roughly 10.29% from about 10.30%, and is effectively stable in the context of other model changes.
The future P/E has risen slightly to around 30.8x from about 30.5x, implying a modestly higher valuation multiple on forward earnings.

Strategic copper expansion and optimization projects position the company to capitalize on electrification trends and achieve superior volume growth compared to peers.
Emphasis on strong balance sheet, ESG leadership, and stable jurisdictions supports sustained earnings, premium customer access, and resilience against market and regulatory risks.
Project setbacks, rising costs, regulatory uncertainty, and commodity price weakness threaten Teck's earnings quality, revenue diversification, and ability to achieve production growth.

Catalysts

About Teck Resources

Engages in research, exploration, development, processing, smelting, refining, and reclamation of mineral properties in Asia, the Americas, and Europe.What are the underlying business or industry changes driving this perspective?

The sanctioned Highland Valley Copper Mine Life Extension project and ongoing optimization/debottlenecking at QB are set to double Teck's copper production by decade's end, enabling the company to capitalize on the accelerating demand for copper from global electrification and energy transition, which should materially increase revenue and long-term earnings growth.
Teck is progressing lower-risk, high-return copper growth projects (Zafranal, San Nicolas) that are well-advanced in permitting and construction readiness, offering near-term expansion opportunities in stable jurisdictions and positioning the company to capture outsized volume growth and improved net margins versus industry peers.
The company's strong balance sheet and robust liquidity ($4.8B in cash and $8.9B total liquidity) provide capacity to execute large-scale copper growth investments and shareholder returns (buybacks/dividends), supporting sustained increases in per-share earnings and capital returns.
Teck's ongoing investment in ESG initiatives, safety culture, and sustainable mining (19 consecutive years recognized as a top Canadian corporate citizen) enhances its access to premium customers and capital, reduces regulatory and reputational risk, and should help support higher realized prices and better long-term margin resilience.
Tightening global metals supply amid underinvestment, combined with Teck's portfolio repositioning toward base metals and operations in geopolitically stable regions (Canada/Chile), positions the company to benefit from price appreciation and superior margin expansion as end-users and governments prioritize secure and responsible sourcing.

Teck Resources Earnings and Revenue Growth

Teck Resources Future Earnings and Revenue Growth

Assumptions

How have these above catalysts been quantified?

Analysts are assuming Teck Resources's revenue will grow by 4.9% annually over the next 3 years.
Analysts assume that profit margins will increase from 2.1% today to 9.5% in 3 years time.
Analysts expect earnings to reach CA$1.1 billion (and earnings per share of CA$2.3) by about September 2028, up from CA$208.0 million today. However, there is a considerable amount of disagreement amongst the analysts with the most bullish expecting CA$1.4 billion in earnings, and the most bearish expecting CA$739 million.
In order for the above numbers to justify the analysts price target, the company would need to trade at a PE ratio of 27.4x on those 2028 earnings, down from 109.5x today. This future PE is greater than the current PE for the US Metals and Mining industry at 18.0x.
Analysts expect the number of shares outstanding to decline by 4.57% per year for the next 3 years.
To value all of this in today's terms, we will use a discount rate of 7.17%, as per the Simply Wall St company report.

Teck Resources Future Earnings Per Share Growth

Risks

What could happen that would invalidate this narrative?

Persistent operational delays and unforeseen technical challenges at major projects like QB2, including the ongoing TMF (Tailings Management Facility) issues and shiploader repairs, risk continued production shortfalls and increased costs, which could reduce revenue growth and erode net margins.
Material cost inflation, higher project contingencies, and the impact of tariffs and accelerated equipment procurement-as seen with the Highland Valley Copper Mine Life Extension-indicate that Teck's large capital projects are susceptible to persistent CapEx escalation, potentially straining free cash flow and affecting long-term earnings quality.
While Teck's strategy is focused on copper growth, persistent exposure to regulatory uncertainty, complex permitting, and extended project timelines in multiple jurisdictions (Canada, Chile, Peru, Mexico) could delay ramp-up or expansion of new mines, limiting expected revenue diversification and impairing future earnings.
Teck's near-term and long-term profitability remains vulnerable to declines in copper and zinc prices, as illustrated by weaker segment results this quarter-should metals prices continue to underperform, the company's revenues and net earnings would be meaningfully impacted.
Increasing climate
and ESG-related operational risks-including the impact of water scarcity (noted as a prior constraint in Chile) and stricter environmental regulations-could elevate compliance and operating costs across Teck's portfolio, constraining margins and limiting the company's ability to deliver on ambitious production growth targets.

Valuation

How have all the factors above been brought together to estimate a fair value?

The analysts have a consensus price target of CA$57.682 for Teck Resources based on their expectations of its future earnings growth, profit margins and other risk factors. However, there is a degree of disagreement amongst analysts, with the most bullish reporting a price target of CA$68.0, and the most bearish reporting a price target of just CA$47.0.
In order for you to agree with the analyst's consensus, you'd need to believe that by 2028, revenues will be CA$11.5 billion, earnings will come to CA$1.1 billion, and it would be trading on a PE ratio of 27.4x, assuming you use a discount rate of 7.2%.
Given the current share price of CA$46.59, the analyst price target of CA$57.68 is 19.2% higher.
We always encourage you to reach your own conclusions though. So sense check these analyst numbers against your own assumptions and expectations based on your understanding of the business and what you believe is probable.

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Disclaimer

AnalystConsensusTarget is a tool utilizing a Large Language Model (LLM) that ingests data on consensus price targets, forecasted revenue and earnings figures, as well as the transcripts of earnings calls to produce qualitative analysis. The narratives produced by AnalystConsensusTarget are general in nature and are based solely on analyst data and publicly-available material published by the respective companies. These scenarios are not indicative of the company's future performance and are exploratory in nature. Simply Wall St has no position in the company(s) mentioned. Simply Wall St may provide the securities issuer or related entities with website advertising services for a fee, on an arm's length basis. These relationships have no impact on the way we conduct our business, the content we host, or how our content is served to users. The price targets and estimates used are consensus data, and do not constitute a recommendation to buy or sell any stock, and they do not take account of your objectives, or your financial situation. Note that AnalystConsensusTarget's analysis may not factor in the latest price-sensitive company announcements or qualitative material.

TECK.B: Merger Activity And Copper Prices Will Shape Future Risk And Reward