Overview
UBS has increased its price target for Teck Resources Ltd to C$90.00 from C$80.00 while retaining a Buy recommendation on the stock. The broker’s move accompanies a positive view on Teck’s commodity profile and growth prospects, particularly from copper, which UBS anticipates will supply the majority of the company’s future earnings power.
Share performance and recent revisions
Teck’s share price has climbed to near its 52-week high of $55.94, with returns of about 9% over the past week and more than 66% over the past six months, based on InvestingPro data cited in the note. UBS noted that several analysts have been revising Teck’s earnings estimates upward recently; InvestingPro data referenced six analysts who have lifted earnings projections for the upcoming period and pointed to net income growth expected this year.
Why UBS is constructive
UBS underscored Teck’s favourable commodity mix as central to its bullish outlook. The bank estimates that roughly 80% of Teck’s projected 2027 EBITDA will be derived from copper mines. UBS expects copper to benefit from higher medium-term prices on the back of what it characterises as strong fundamentals, supporting near- to medium-term cash flow.
Beyond price assumptions, UBS set out a production thesis. The firm models a conservative 25% increase in copper output by 2030 to reach 1.4 million tonnes, driven by planned turnarounds at Collahuasi, QB and Los Bronces. UBS also suggested there is a credible pathway to a further 25% expansion into the early 2030s, indicating a multi-stage growth trajectory rather than a one-off uplift.
Balance sheet and valuation context
On financials, UBS pointed to a healthy liquidity position at Teck, noting a current ratio of 2.78 and that liquid assets exceed short-term obligations. That cushion, UBS argues, supports capital allocation choices including growth investment and shareholder returns.
UBS also flagged potential valuation upside. Despite Teck’s recent share-price appreciation, the company has lagged copper peers through the most recent copper rally, in UBS’s view. The stock trades at a low price-to-earnings multiple relative to near-term earnings growth, and UBS highlighted an attractive PEG ratio of 0.18. The report described the valuation as compelling and modelled a combined Anglo American-Teck entity trading at about 7x 2027 EV/EBITDA at spot prices, compared with competitor Antofagasta at around 9x.
Shareholder returns and corporate developments
Adding to shareholder value considerations, analysis shows Teck’s management has been actively repurchasing shares while continuing to pay dividends for 16 consecutive years. Those actions underlie UBS’s constructive view on the company’s capital allocation discipline.
Separately, the proposed merger between Teck and Anglo American remains a major corporate storyline. Institutional Shareholder Services Inc. has recommended that investors support the merger, which is expected to create a roughly $50 billion company producing copper, zinc and other metals globally. Shareholders of both companies will vote on the transaction at upcoming meetings. The merger is under review by the Canadian government on national security grounds, with a decision expected in the coming months.
Analyst caution
Not all brokers have become more bullish. TD Cowen downgraded Teck from Buy to Hold even as it raised its price target, explaining that it expects the stock to trade in a range through 2026. Raymond James moved its rating from Outperform to Market Perform, attributing the change to adjustments in copper price forecasts driven by supply challenges and inflationary pressures. These downgrades reflect analyst caution amid merger-related uncertainty and evolving commodity assumptions.
Conclusion
UBS’s upgrade to a C$90 target reflects confidence in Teck’s copper-led earnings profile, projected production increases and strong liquidity, balanced by ongoing corporate developments and mixed analyst sentiment across the industry. Investors will continue to monitor the merger vote and the outcome of the Canadian national security review as material near-term catalysts.
Key details at a glance
- UBS price target: raised to C$90.00 from C$80.00; Buy rating maintained.
- Teck share performance: near 52-week high of $55.94; +9% past week; +66% past six months.
- Copper contribution: ~80% of projected 2027 EBITDA expected from copper operations.
- Volume outlook: UBS forecasts a 25% rise in copper volumes by 2030 to 1.4 million tonnes, with a potential further 25% into the early 2030s.
Analyst actions
- Six analysts have recently raised earnings estimates for Teck, with net income expected to grow this year, according to InvestingPro data.
- TD Cowen downgraded Teck from Buy to Hold; Raymond James downgraded from Outperform to Market Perform.