Teck Resources Price Target Raised by Scotiabank on Strong Liquidity and Zinc Performance

Scotiabank Elevates Teck Resources Price Target to C$70 Amid Robust Q2 Performance

On September 10, 2025, Scotiabank upgraded its price target for Teck Resources (NYSE:TECK) shares to C$70 from C$55, reaffirming an "Outperform" rating. This adjustment reflects the bank's confidence in the Canadian mining company's robust financial health and strong operational performance, particularly within its Zinc segment.

Q2 2025 Financials Highlight Strong Capital Position

Teck Resources reported a solid financial position for the second quarter of 2025, with total liquidity reaching $8.9 billion, including $4.8 billion in cash. This substantial capital base provides resilience against market uncertainties and supports the company's strategic initiatives. The company actively engaged in shareholder returns, distributing over $1.1 billion to shareholders year-to-date. This includes $487 million in share buybacks and $61 million in base dividends during Q2 alone. Adjusted EBITDA for the quarter stood at $722 million, marking a slight increase from the previous year. Profit from continuing operations before taxes was $125 million.

Zinc Segment Drives Profitability Amidst Operational Headwinds

The Zinc segment emerged as a key driver of profitability in Q2 2025, with gross profit before depreciation and amortization soaring by 137% year-over-year to $159 million. Net cash unit costs for Zinc also improved to $0.49 per pound, underscoring operational efficiencies. Conversely, the Copper segment generated a gross profit before depreciation and amortization of $673 million, a modest decrease from the prior year, with copper production reaching 109,100 tonnes.

Despite these strengths, Teck Resources continues to navigate challenges at its Quebrada Blanca (QB) operation in Chile. Ongoing development work at the Tailings Management Facility has limited mill online time, necessitating a revised production outlook for copper. Furthermore, an outage at the QB port facility's shiploader is expected to extend into the first half of 2026, leading to increased costs due to alternative port arrangements. This operational complexity has prompted Teck to defer approvals for major growth projects until QB2 achieves consistent operations and target output, alongside a comprehensive company-wide operations review expected to conclude by October 2025.

Market Context and Strategic Implications

Teck Resources' strategic pivot towards "metals of the future," specifically copper and zinc, is central to its long-term growth narrative. The company completed the sale of its steelmaking coal business in July 2024, aligning with the accelerating global energy transition. This shift positions Teck to capitalize on robust demand for these critical minerals.

The broader market for copper has seen prices reach record highs in 2025, with Scotiabank projecting prices at $4.05/lb as of September 26, 2025, and anticipating a modest supply deficit in the near term. Longer-term forecasts from Goldman Sachs indicate a potential 8-million-ton supply deficit by 2030, reinforcing the strategic importance of Teck's copper assets like QB2 and the planned Highland Valley Copper Mine Life Extension (HVC MLE) project, which aims to add 132,000 tonnes of annual production. In the zinc market, global inventories are at decade lows, with Teck's Red Dog mine supplying a significant portion of North America's demand.

Analyst Perspectives and Future Outlook

Scotiabank's reiterated "Outperform" rating on Teck Resources underscores a belief in the company's ability to leverage its strong balance sheet and commodity exposure despite operational hurdles. While the immediate outlook is tempered by QB challenges and a revised copper production guidance, the long-term fundamentals remain attractive.

RBC Capital Markets analyst Sam Crittenden maintained a USD$67 price target with an "Outperform" rating on Teck's Toronto-listed shares but noted an expectation of a "negative reaction" to the operational review and management changes. Analysts generally acknowledge the potential for Teck's valuation to contract if QB2's challenges persist. However, the company's robust liquidity and focus on cost discipline are seen as providing a margin of safety.

Looking ahead, the market will closely monitor the outcome of Teck's comprehensive operational review, particularly regarding the resolution of QB2's tailings management issues and the path to achieving targeted production rates. The success of the HVC MLE project and the broader trajectory of copper and zinc prices will be key determinants of Teck's performance in the coming quarters. Teck has also engaged a senior adviser with extensive experience, including in Chile, to assist the QB team, signaling a dedicated effort to resolve these operational complexities.