TSX:TECK.A - Post by User
Post by
RJsizzlon Oct 28, 2020 12:49am
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Post# 31793845
Reaction to 3rd Quarter Earnings
Reaction to 3rd Quarter EarningsI am surprised by the market's negative reaction to Teck's Q3 results.
Admittedly, Q3 did not have any unexpectedly positive news. Everything was more or less in line with previous guidance and published commodity prices.
But based on the information in the MD&A and conference call, there seem to be a number of catalysts shaping for Q4 2020 and Q1 2021 that were not derailed in Q3 - completion of the Neptune terminal upgrade, (which should ensure low transportation costs for coking coal), improved technical performance for both copper and zinc mines, and the restored production at Fort Hills (which should lower per barrel costs).
On Q4 coking coal pricing, the company said the following:
...we're expecting that the global demand will be unaffected by those trade restrictions. And we're also expecting that the improved sentiment and the potential disruptions related to weather in Australia in the fourth quarter and also in early 2021, should support increased activity in the steelmaking coal market, and we are seeing that as shown with our guidance for Q4.
Teck Resources, like most materials/commodities companies, is a feast or famine stock. But even in a famine, Teck is trading at an adjusted annualized Q3 2020 P/E ratio of 17.26 (16.57/0.96).
If this company was called Tech Resources, share prices would be at $35!