Teck Resources Limited (TSE:TECK.B) Just Released Its Annual Earnings: Here's What Analysts Think
It's been a good week for Teck Resources Limited (TSE:TECK.B) shareholders, because the company has just released its latest annual results, and the shares gained 7.9% to CA$27.09. Revenues were in line with expectations, at CA$9.0b, while statutory losses ballooned to CA$1.62 per share. This is an important time for investors, as they can track a company's performance in its report, look at what experts are forecasting for next year, and see if there has been any change to expectations for the business. We've gathered the most recent statutory forecasts to see whether the analysts have changed their earnings models, following these results.
Check out our latest analysis for Teck Resources
Following the latest results, Teck Resources' 13 analysts are now forecasting revenues of CA$11.3b in 2021. This would be a sizeable 25% improvement in sales compared to the last 12 months. Teck Resources is also expected to turn profitable, with statutory earnings of CA$2.97 per share. In the lead-up to this report, the analysts had been modelling revenues of CA$11.1b and earnings per share (EPS) of CA$2.59 in 2021. There's been a pretty noticeable increase in sentiment, with the analysts upgrading revenues and making a nice increase in earnings per share in particular.
Althoughthe analysts have upgraded their earnings estimates, there was no change to the consensus price target of CA$28.79, suggesting that the forecast performance does not have a long term impact on the company's valuation. There's another way to think about price targets though, and that's to look at the range of price targets put forward by analysts, because a wide range of estimates could suggest a diverse view on possible outcomes for the business. Currently, the most bullish analyst values Teck Resources at CA$36.00 per share, while the most bearish prices it at CA$22.00. As you can see, analysts are not all in agreement on the stock's future, but the range of estimates is still reasonably narrow, which could suggest that the outcome is not totally unpredictable.
One way to get more context on these forecasts is to look at how they compare to both past performance, and how other companies in the same industry are performing. The analysts are definitely expecting Teck Resources' growth to accelerate, with the forecast 25% growth ranking favourably alongside historical growth of 6.1% per annum over the past five years. Compare this with other companies in the same industry, which are forecast to grow their revenue 7.5% next year. Factoring in the forecast acceleration in revenue, it's pretty clear that Teck Resources is expected to grow much faster than its industry.
The Bottom Line
The biggest takeaway for us is the consensus earnings per share upgrade, which suggests a clear improvement in sentiment around Teck Resources' earnings potential next year. Happily, they also upgraded their revenue estimates, and are forecasting revenues to grow faster than the wider industry. There was no real change to the consensus price target, suggesting that the intrinsic value of the business has not undergone any major changes with the latest estimates.
With that in mind, we wouldn't be too quick to come to a conclusion on Teck Resources. Long-term earnings power is much more important than next year's profits. We have forecasts for Teck Resources going out to 2025, and you can see them free on our platform here.
And what about risks? Every company has them, and we've spotted 1 warning sign for Teck Resources you should know about.
This article by Simply Wall St is general in nature. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.
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