Key Morningstar Metrics for Teck Resources
- Fair Value Estimate: C$49.00
- Morningstar Rating: ★
- Morningstar Economic Moat Rating: None
- Morningstar Uncertainty Rating: High
What We Thought of Teck Resources’ Earnings
Teck Resources’ TECK.B 2025 fourth-quarter earnings were very strong, driven by the rising copper price, with adjusted EBITDA up 80% on a year earlier, to C$1.5 billion. Full-year 2025 adjusted EBITDA rose about 50% to C$4.3 billion. The quarterly dividend of C$0.125 per share is unchanged.
Why it matters: Management reiterated medium-term volume and 2026 unit cost guidance.
The bottom line: We maintain our fair value estimate for Teck. Shares are materially overvalued, trading on a forward P/E of 22. This assumes a copper price of around USD 5.90 per pound in 2026, similar to spot and near historical highs.
- The overvaluation is due to its upcoming merger with no-moat Anglo American, whose shares are also very expensive due to the strong copper price. Teck shareholders will receive 1.3301 Anglo shares for each Teck share they hold. Anglo also plans to pay a USD 4.19 premerger special dividend.
- The elevated copper price is being driven by optimism over rising demand due to the energy transition, as well as short-term market dislocations. However, we assume the price falls to about USD 3.80 per pound midcycle from 2030 based on our estimate of the long-run marginal cost of production.
Coming up: The merger will form copper-focused Anglo Teck, with iron ore and zinc its other major commodities. Anglo Teck will be one of the world’s largest copper miners, producing around 1 million metric tons (its share) in 2028.
- It is likely to be effective later this year or in early 2027.
Key stats: We expect copper volumes of 400,000 metric tons (its share) in 2026, up from 360,000 in 2025, driven by increased production at Quebrada Blanca 2 and Antamina. This is around the midpoint of guidance.
- We forecast steady refined zinc volumes of about 230,000 metric tons in 2026. However, due to lower production at Red Dog and Antamina, we expect 430,000 metric tons of mined zinc, also near the guidance midpoint and down from 560,000 in 2025.
