Need To Know: Analysts Just Made A Substantial Cut To Their Teck Resources Limited (TSE:TECK.B) Estimates

The analysts covering Teck Resources Limited (TSE:TECK.B) delivered a dose of negativity to shareholders today, by making a substantial revision to their statutory forecasts for this year. Both revenue and earnings per share (EPS) forecasts went under the knife, suggesting analysts have soured majorly on the business.

Following the downgrade, the consensus from 14 analysts covering Teck Resources is for revenues of CA$14b in 2024, implying a noticeable 6.3% decline in sales compared to the last 12 months. Statutory earnings per share are anticipated to fall 16% to CA$2.60 in the same period. Before this latest update, the analysts had been forecasting revenues of CA$17b and earnings per share (EPS) of CA$3.68 in 2024. Indeed, we can see that the analysts are a lot more bearish about Teck Resources' prospects, administering a measurable cut to revenue estimates and slashing their EPS estimates to boot.

See our latest analysis for Teck Resources

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Analysts made no major changes to their price target of CA$74.24, suggesting the downgrades are not expected to have a long-term impact on Teck Resources' valuation.

Taking a look at the bigger picture now, one of the ways we can understand these forecasts is to see how they compare to both past performance and industry growth estimates. We would highlight that sales are expected to reverse, with a forecast 8.4% annualised revenue decline to the end of 2024. That is a notable change from historical growth of 8.9% over the last five years. Compare this with our data, which suggests that other companies in the same industry are, in aggregate, expected to see their revenue grow 15% per year. It's pretty clear that Teck Resources' revenues are expected to perform substantially worse than the wider industry.

The Bottom Line

The biggest issue in the new estimates is that analysts have reduced their earnings per share estimates, suggesting business headwinds lay ahead for Teck Resources. Unfortunately analysts also downgraded their revenue estimates, and industry data suggests that Teck Resources' revenues are expected to grow slower than the wider market. The lack of change in the price target is puzzling in light of the downgrade but, with a serious decline expected this year, we wouldn't be surprised if investors were a bit wary of Teck Resources.

So things certainly aren't looking great, and you should also know that we've spotted some potential warning signs with Teck Resources, including recent substantial insider selling. For more information, you can click here to discover this and the 2 other warning signs we've identified.

Of course, seeing company management invest large sums of money in a stock can be just as useful as knowing whether analysts are downgrading their estimates. So you may also wish to search this free list of stocks with high insider ownership.

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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. 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.

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team@simplywallst.com