Morgan Stanley Sees Met Coal Rebound as Key Catalyst for Shares on Teck Resources Ltd.

In a report published Tuesday, Morgan Stanley analyst Paretosh Misra reiterated an Equal-Weight rating on

. In the report, Morgan Stanley noted, “TCK is an equity play on copper, met coal and zinc. The company's high quality portfolio compares well with diversified miners, on costs, growth, balance sheet, location of reserves and life of reserves. TCK's key growth projects are QB2 & Relincho in copper, Quintette in met coal and Fort Hills in oil sands. Continued drive toward lower coke consumption in steel making will provide support to premium for TCK's high strength coal products, though slower demand growth may limit upside to met coal prices. We are EW on valuation. TCK trades at ~7.0x 2014e EBITDA at spot prices, but it may appeal to investors looking for met coal leverage and strong balance sheet (ND/EBITDA of 1.7x vs. 2.2x avg. for coal comps based on consensus estimates).” Teck Resources Ltd. closed on Friday at $23.88.