Jefferies raises Teck Resources stock price target to C$74 on takeover potential

Anglo American is reportedly acquiring Teck Resources in an all-stock, $20.2 billion merger, prompting Jefferies to raise its price target to C$74.00 from C$60.00 with a Buy rating. Jefferies views Teck as deeply undervalued on a standalone basis, setting its target based on an 8.0x 2026E EV/EBITDA takeout multiple. This development follows Teck's mixed Q2 2025 results, which saw an EPS beat but a revenue miss, and comes amidst ongoing challenges at its QB copper project, yet Deutsche Bank also upgraded Teck to Buy, citing a compelling value opportunity.

Analysis

Teck Resources (TECK) is at the center of significant M&A speculation, reportedly as a target for Anglo American, which is driving a bullish re-rating from analysts despite mixed underlying fundamentals. Jefferies has increased its price target to C$74.00 from C$60.00, maintaining a Buy rating, based on the premise that the stock is "deeply undervalued" and could attract a takeout multiple of 8.0x its 2026E EV/EBITDA. This view is supported by a belief that the market has overly penalized Teck for production target concerns at its QB copper project. Echoing this sentiment, Deutsche Bank upgraded the stock to Buy, citing a "compelling value opportunity" while maintaining a $42.00 price target. This analyst optimism contrasts with Teck's recent Q2 2025 performance, which saw an earnings per share beat at $0.38 versus a $0.23 forecast, but a notable revenue miss at $2.02 billion against a $2.17 billion forecast. The conflicting signals—positive analyst actions driven by M&A potential versus weak top-line results and ongoing project challenges—frame the current investment thesis as one balanced between a valuation/event-driven opportunity and tangible operational risk.

Key Decisions for Investors

• Investors should recognize that the primary bull case for Teck is currently founded on M&A speculation and a perceived valuation discount, rather than on recent operational performance, which remains mixed.
• Monitor all news and progress related to the QB copper project, as its challenges are the core reason for both the stock's historical underperformance and the analysts' current 'deep value' thesis.
• Consider the significant gap between the current share price of $35.11, Deutsche Bank's value-based target of $42.00, and Jefferies' M&A-driven target of C$74.00 to gauge the risk-reward profile based on the probability of a takeover materializing.
• Given that the recent revenue miss prompted a share price drop, investors should be cautious of fundamental execution risk, even as the speculative M&A narrative gains traction among analysts.