TSX:TECK.A - Post by User
Post by
Nadia6519on May 14, 2022 9:33am
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Post# 34683786
From Banque Nationale
From Banque NationaleToday's news ( Zinc Satellite Initiative ) further supports our view that Teck's current valuation doesn't accurately reflect the sum-of-parts across its coal, copper, zinc and oil business units. Highlighting these early-staged projects within the portfolio further highlights the company's flexibility and ability to leverage their extensive project portfolio to drive organic growth across a diverse array of commodity types.
Our Outperform rating is supported by a step-wise improvement in Teck's coking coal operations in 2022 following completion of the Neptune terminal expansion. Record coal prices continue to drive near-term FCF, which we believe isn't accurately reflected by the current share price. Teck's strong balance sheet, cost reduction initiatives, organic growth within the copper division and long-term commitment to returning capital to shareholders are all supportive of a higher valuation than currently ascribed by the market.
TECK/B is trading at 1.08x P/NAV compared to Intermediate Copper peers at 0.83x and 3.4x EV/2022E CF compared with Global Diversified Peers at 4.2x.
Our target price (C$65.00) is derived from a multiple of 1.2x NAV (50%) + 5.0x EV/2022E CF (25%) + 5.0x EV/2023E CF (25%).