Teck Resources Earnings: Lower Prices, Higher Costs Affect Earnings Despite Increasing Copper Sales

Teck Resources' first quarter broadly met our forecasts, and full-year guidance is maintained. The shares screen about 50% overvalued, which we think primarily reflects Teck’s rising copper sales and investor optimism for copper demand to significantly increase with decarbonization and electrification. No-moat BHP’s proposal for no-moat Anglo American also suggests that copper miners with growth, like Teck, are attractive to potential suitors bullish on long-term copper demand. We maintain our fair value estimate for no-moat Teck at USD 34/CAD 46 per share.