Why Teck Resources (TCK) Stock Is Up Today

NEW YORK (TheStreet) -- Teck Resources (TCK) is up 5.5% to $23.72 on Tuesday.

Trading volume is heavy today at 4.1 million, almost double the stock's three month average.

The rise comes following analysts at Morgan Stanley  (MS) raising their price target for the natural resource exploration and producing company to $27 per share from $25 per share.

The firm set an "equal weight" rating for the company.

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Separately, TheStreet Ratings team rates TECK RESOURCES LTD as a Hold with a ratings score of C. TheStreet Ratings Team has this to say about their recommendation:

"We rate TECK RESOURCES LTD (TCK) a HOLD. The primary factors that have impacted our rating are mixed - some indicating strength, some showing weaknesses, with little evidence to justify the expectation of either a positive or negative performance for this stock relative to most other stocks. The company's strengths can be seen in multiple areas, such as its largely solid financial position with reasonable debt levels by most measures, reasonable valuation levels and expanding profit margins. However, as a counter to these strengths, we also find weaknesses including a generally disappointing performance in the stock itself, disappointing return on equity and weak operating cash flow."

Highlights from the analysis by TheStreet Ratings Team goes as follows:

  • The current debt-to-equity ratio, 0.42, is low and is below the industry average, implying that there has been successful management of debt levels. To add to this, TCK has a quick ratio of 1.88, which demonstrates the ability of the company to cover short-term liquidity needs.
  • 36.83% is the gross profit margin for TECK RESOURCES LTD which we consider to be strong. Regardless of TCK's high profit margin, it has managed to decrease from the same period last year. Despite the mixed results of the gross profit margin, the net profit margin of 9.76% trails the industry average.
  • Net operating cash flow has declined marginally to $769.00 million or 3.39% when compared to the same quarter last year. Despite a decrease in cash flow TECK RESOURCES LTD is still fairing well by exceeding its industry average cash flow growth rate of -37.88%.
  • The company's current return on equity has slightly decreased from the same quarter one year prior. This implies a minor weakness in the organization. Compared to other companies in the Metals & Mining industry and the overall market on the basis of return on equity, TECK RESOURCES LTD has outperformed in comparison with the industry average, but has underperformed when compared to that of the S&P 500.
  • You can view the full analysis from the report here: TCK Ratings Report
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