Teck Resources stock holds steady as Stifel maintains rating despite production cuts

Investing.com - Stifel has reiterated its Hold rating and C$60.00 price target on Teck Resources Ltd (TSX:TECK-B) (NYSE:TECK), a $21 billion market cap mining company, following the company’s completion of a comprehensive operational review of its Quebrada Blanca (QB) mine. According to InvestingPro data, the company maintains a strong financial health score of 2.7 out of 3, with liquid assets exceeding short-term obligations.

The mining company announced updated four-year guidance (2025-2028) that includes downward revisions to copper production due to continuing constraints at the QB tailings management facility (TMF) and higher copper cash costs resulting from the lower production outlook.

Teck Resources also disclosed material reductions to zinc production guidance at its Red Dog operation, further impacting the company’s overall production profile for the coming years.

Stifel estimates these changes will reduce Teck’s four-year cumulative EBITDA by 15%, including copper production impacts of minus 93,000 tonnes and minus 48,000 tonnes in 2026 and 2027, respectively.

The investment firm notes that recent supply shocks across the industry have removed approximately 1.1 million tonnes of copper over the next three years (2025-2027), reinforcing its view of the market’s vulnerability following a decade of underinvestment in new capacity.

In other recent news, Teck Resources reported disappointing third-quarter results, with copper sales totaling 110,300 tonnes, falling short of the Bloomberg Consensus estimate of 128,943 tonnes. The company’s copper production also missed expectations, coming in at 104,100 tonnes compared to the anticipated 127,497 tonnes. Despite these setbacks, Jefferies has maintained its Buy rating on Teck Resources, setting a price target of Cdn$80.00, even though the company revised its production guidance for several operations. Benchmark also reiterated its Buy rating, citing a merger agreement between Teck Resources and Anglo American to form the Anglo Teck group. This merger is expected to create the world’s fifth-largest copper producer, offering increased exposure to iron ore and zinc. Following the merger announcement, Berenberg upgraded Anglo American’s stock rating from Sell to Hold, raising its price target to GBP23.00. Teck Resources’ CEO, Jonathan Price, stated that the company is focusing on obtaining approval for the merger, acknowledging the possibility of a bidding war.

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