Deutsche Bank upgraded Teck Resources Ltd. (NYSE:TECK) to Buy from Hold with a price target of $42, sending shares up more than 1% in premarket trade Thursday.
The analysts said Teck had underperformed this year due to operational issues at its QB project, but noted that investor sentiment had now fallen to very low levels. They highlighted that shares were trading at a wide discount to global peers and below greenfield replacement costs, despite copper assets carrying high strategic value in a consolidating industry.
The firm said Teck’s recently announced action plan to resolve tailings facility challenges was positive, with revised guidance expected by the third-quarter results in October. While risks remained that remediation could take longer than anticipated, analysts argued the stock was already pricing in a permanent impairment, creating an attractive entry point.
