Teck Resources (TECK): Navigating Mixed Analyst Ratings Amid Copper Price Optimism and Earnings Concerns

In the volatile metals market of 2025, Teck Resources (NYSE:TECK) stands at a crossroads. Analysts are split between cautious optimism and bearish skepticism, reflecting the company's dual role as a cornerstone of the global energy transition and a victim of operational headwinds. With copper prices fluctuating wildly due to U.S. tariff threats, COMEX-LME arbitrage gaps, and shifting market benchmarks, investors must weigh Teck's strategic investments against near-term execution risks.

Mixed Analyst Ratings: A Tale of Two Scenarios

Over the past year, 11 analyst firms have rated Teck Resources, resulting in a “Moderate Buy” consensus. However, the divergence in opinions is stark. Morgan Stanley's recent downgrade from Overweight to Equalweight on July 15, 2025, signaled growing caution. While the firm raised its price target to $44 from $42, it cited concerns over production guidance at Quebrada Blanca and the high capital intensity of the Highland Valley Copper Mine Life Extension (HVC MLE) project. Conversely, UBS Group's September 2024 upgrade to a $78 price target highlighted Teck's alignment with the energy transition, particularly the HVC MLE's potential to secure long-term copper supply.

The HVC MLE, a $2.1–2.4 billion investment to extend the mine's life to 2046, is a strategic bet on copper's role in electrification and grid infrastructure. Yet, Raymond James' recent price target reduction to Cdn$63 (from Cdn$71) underscores the risk of delayed timelines or cost overruns. For investors, the key question is whether Teck's capital discipline and operational resilience can offset these challenges.

Copper Price Volatility: A Double-Edged Sword

The U.S. copper market has been a storm center in 2025. COMEX prices surged to $5.6855 per pound in early July following Trump's 50% import tariff announcement, while LME prices stabilized at $9,591.48 per metric ton (as of July 17). This disconnect has forced U.S. scrap mills to pivot toward LME pricing, reducing exposure to COMEX's speculative swings.

For Teck, the shift to LME benchmarks is a net positive. The company's Q2 2025 copper sales revenue of $1.454 billion—despite a 2% decline in LME prices year-over-year—was bolstered by strong by-product revenues and reduced smelter charges. However, production cuts at Quebrada Blanca (210,000–230,000 tonnes for 2025 vs. 230,000–270,000 tonnes previously) highlight operational fragility.

Strategic Value in a High-Commodity World

Teck's long-term value proposition hinges on its ability to balance growth and efficiency. The HVC MLE project, alongside Zafranal and San Nicolás, aims to boost annual copper production to 800,000 tonnes by the late 2030s—a 78% increase from 2024. These projects align with global demand projections, which suggest copper consumption could double by 2040 to meet decarbonization goals.

However, execution risks remain. Quebrada Blanca's tailings management delays and a shiploader outage at its port facility have already pushed production guidance lower. Investors must assess whether Teck's $8.9 billion liquidity cushion and $3.25 billion buyback program (68% complete) can sustain operations through these challenges.

Earnings Outlook: Resilience or Reassessment?

Teck's Q2 2025 earnings report, released on July 24, 2025, showed mixed results. Adjusted EBITDA of $722 million and copper production of 109,100 tonnes outperformed expectations, but zinc margins and zinc prices dragged down overall performance. The company maintained its 2025 production forecast despite operational setbacks, a testament to its resilience.

The critical test will be how Teck navigates the remainder of 2025. If it can stabilize Quebrada Blanca's throughput and accelerate Zafranal's development, the stock could see renewed momentum. Conversely, further production delays or cost overruns could trigger a re-rating.

Investment Thesis: Bullish with Caution

The recent analyst upgrades, particularly UBS' $78 target, reflect confidence in Teck's strategic vision. However, Morgan Stanley's downgrade and Raymond James' bearish revisions highlight the need for operational execution. For investors, the key metrics to watch ahead of Q2 earnings include:
1. Copper production guidance for Quebrada Blanca and HVC MLE progress.
2. Capital allocation discipline—will Teck prioritize growth or shareholder returns?
3. Balance sheet strength—how will liquidity be deployed amid rising copper prices?

Given the current price of $35.16 and an average analyst target of $60.75, Teck offers a 72.8% upside. However, the path to that target is fraught with execution risks. A cautious bullish stance is warranted for those who believe in the energy transition's long-term copper demand and Teck's ability to navigate short-term turbulence.

Final Note: Teck Resources is a high-conviction play for investors comfortable with volatility. The coming months will test its strategic resolve—and determine whether the recent analyst optimism justifies a leap of faith.