Aravinda Galappatthige downgraded the stock to “hold” from “buy” given pressures on revenues.“While the stock is inexpensively priced, particularly from a free cash flow perspective, we prefer to take a step back in light of sustained promotional pressure in the market and its impact on service revenue trends,” Mr. Galappatthige said in a note to clients. “With overall service revenue growth unlikely to get much better than 1% through H2/24, we see the balance sheet leverage of 4.
“We could potentially become constructive on the name again following an updated technical report on the Donlin Gold project (last study released on Donlin Gold was the 2021 feasibility study, but the joint venture with Barrick Gold decided earlier this year to delay work on updating the FS for at least another year,” he said.Teck on Wednesday lowered its full-year copper forecast by just under 7 per cent to about 468,000 tonnes.
“Management believes the geotechnical issue can be rectified before the end of this year and does not anticipate an impact on 2025 or beyond production; however, this does leave lingering uncertainty around the operation, in our view,” RBC analyst Sam Crittenden said in a note. “We lower our 2024 production estimate -5%, to 447Kt from 473Kt, to reflect updated guidance and reduce 2025 production at QB by 10%.
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