Teck Resources (TSX:TECK.B): Checking the Valuation After a Choppy 3-Month Climb

Teck Resources (TSX:TECK.B) has been grinding higher over the past 3 months, up about 9%, even as the past week saw a pullback. That mix of momentum and volatility raises some interesting valuation questions.

See our latest analysis for Teck Resources.

Zooming out, Teck’s roughly 9% 3 month share price return and modest year to date gain suggest steady, if choppy, momentum. This appears to build on the back of incremental progress in its copper focused growth story and shifting risk sentiment around commodities, even as the latest close sits at CA$59.36 and the one year total shareholder return is essentially flat compared with a much stronger multiyear record.

If Teck’s mixed momentum has you rethinking where the next leg of returns might come from, it could be worth scanning fast growing stocks with high insider ownership for other under the radar ideas with conviction behind them.

With earnings growing modestly and the share price sitting just below analyst targets but at a hefty discount to some intrinsic value estimates, is Teck quietly undervalued or is the market already baking in its copper driven upside?

Most Popular Narrative: 5.7% Undervalued

With Teck Resources last closing at CA$59.36 against a narrative fair value of about CA$62.94, the story leans toward modest upside grounded in copper centric growth assumptions.

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.

Read the complete narrative.

Curious how doubling copper output, steadier margins, and a richer future earnings multiple all fit together? The narrative spells out the full valuation blueprint.

Result: Fair Value of $62.94 (UNDERVALUED)

Have a read of the narrative in full and understand what's behind the forecasts.

However, persistent project delays and escalating capital costs could strain free cash flow and undermine the copper growth story that underpins the undervaluation case.

Find out about the key risks to this Teck Resources narrative.

Another Angle on Valuation

On earnings, Teck looks stretched, trading at about 23.3 times earnings versus a fair ratio near 17.3 times and a Canadian metals and mining average of 21.4 times. That richer ratio hints at valuation risk if copper or project delivery stumble from here.

See what the numbers say about this price — find out in our valuation breakdown.

Build Your Own Teck Resources Narrative

If this storyline does not quite match your view, dive into the numbers yourself and craft a personalized thesis in minutes, Do it your way.

A good starting point is our analysis highlighting 2 key rewards investors are optimistic about regarding Teck Resources.

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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.

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