Q: With the bad news from Teck.b today, is that signalling a sell?
5i Research Answer:
It is a tougher call here; TECK has lowered production guidance due to a localized geotechnical event at Highland Valley. It does not expect any impact to go beyond this year. It missed earnings estimates (76c vs $1.02) and revenue fell 16% but closely matched estimates ($3.6B). The stock fell nearly 8% on the news, and the drop likely reflects the situation well. It is still considering restructuring, and expects a decision on its coal assets by year end. The news is not great, but we think there is still enough potential here to keep it a hold.