07:58 AM EDT, 04/05/2024 (MT Newswires) -- National Bank of Canada said overnight Thursday that Teck Resources Ltd. (TECK-B.TO)'s steelmaking coal sales volumes of 5.9 million tonnes in the first quarter missed the bank's forecast of 6.1 million tonnes. It noted Teck' coal sales were below the lower end of guidance range of 5.9 million to 6.3 million tonnes.

National Bank said it anticipates cold weather impacts during the quarter to have had a modestly negative impact to its estimated production for Teck of 6.25 million tonnes as well.

Teck's realized steelmaking coal price in the first quarter averaged US$297/t, compared to the bank's forecast of US$275/t, due to differences in sales mix and timing of sales. National Bank also noted that Teck expects to report a negative provisional pricing adjustment of $94 million in the quarter.

National said it will update its estimates as part of a quarterly preview in the coming weeks with Teck's Q1/24 financial results to be released on April 25, 2024.

The bank gave Teck an outperform rating with a $77.50 price target, citing the company's "strong financial position and robust copper growth pipeline. It noted divestiture of the steelmaking coal business is expected to close in Q3 2024 and will provide "significant cash to bolster the balance sheet ahead of delivering the next leg of copper growth as well as returning a significant amount of cash to shareholders -- supportive of a re-rating." Additionally, National noted, the previous elimination of the dual class share structure makes Teck's base metal portfolio more attractive to potential acquirers, leading to multiple expansion following separation of the coal business.