Nomura Securities Cuts Estimates on Teck Resources (TCK); Headwinds for Q3
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Price: $27.98 +2.79%
Rating Summary:
6 Buy, 6 Hold, 0 Sell
Rating Trend:
Up
Today's Overall Ratings:
Up: 21 | Down: 43 | New: 13
Rating Summary:
6 Buy, 6 Hold, 0 Sell
Rating Trend:
Up
Today's Overall Ratings:
Up: 21 | Down: 43 | New: 13
Trade TCK Now!
Nomura Securities maintains a 'Neutral' on Teck Resources (NYSE: TCK) price target of $40.00.
Analyst, Curt Woodworth, said, "We are reducing our EPS estimates for TCK to $2.95 for 2012 (was $3.40) and to $3.10 for 2013 (was $3.30)...We believe Teck is facing some headwinds in the third quarter, which are likely to limit earnings upside, owing to negative mix shift in the coking coal segment towards spot market tonnage. Historically, TCK has shipped ~10% of its coking coal volumes into the spot market, with China the principal buyer; however, this exposure has increased to 15-20% of late. The attractive FCF yield (10% on 2013E) and EV/EBITDA (4.1x 2013E vs historical average 5.3x) suggest further downside is limited. We see limited downside to current copper prices, which has been our primary concern on the stock owing to high correlation risk. TCK also is likely to aggressively repurchase shares in the 2H-12 in our view owing to a strong cash flow position and recent approval by TSX for TCK to repurchase up to 20 million Class B subordinate voting shares (4.3% of the public float)."
For an analyst ratings summary and ratings history on Teck Resources click here. For more ratings news on Teck Resources click here.
Shares of Teck Resources closed at $26.82 yesterday, with a 52 week range of $25.76-$53.51.
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Analyst, Curt Woodworth, said, "We are reducing our EPS estimates for TCK to $2.95 for 2012 (was $3.40) and to $3.10 for 2013 (was $3.30)...We believe Teck is facing some headwinds in the third quarter, which are likely to limit earnings upside, owing to negative mix shift in the coking coal segment towards spot market tonnage. Historically, TCK has shipped ~10% of its coking coal volumes into the spot market, with China the principal buyer; however, this exposure has increased to 15-20% of late. The attractive FCF yield (10% on 2013E) and EV/EBITDA (4.1x 2013E vs historical average 5.3x) suggest further downside is limited. We see limited downside to current copper prices, which has been our primary concern on the stock owing to high correlation risk. TCK also is likely to aggressively repurchase shares in the 2H-12 in our view owing to a strong cash flow position and recent approval by TSX for TCK to repurchase up to 20 million Class B subordinate voting shares (4.3% of the public float)."
For an analyst ratings summary and ratings history on Teck Resources click here. For more ratings news on Teck Resources click here.
Shares of Teck Resources closed at $26.82 yesterday, with a 52 week range of $25.76-$53.51.
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