What happened
Shares of Canadian miner Teck Resources (TECK -1.32%) rose by around 10% in morning trading on Wednesday. By 2:30 p.m. EDT today, the stock was still higher by roughly 9%, so the gains have largely stuck. There were two bits of news here.
So what
Goldman Sachs increased its price target for Teck, taking it from 25 Canadian dollars per share ($19.90) to CAD$28. That's about a 12% increase, but the stock's rating was maintained at neutral. Investors often look kindly on price target increases, so this was likely a support to the price action today, but perhaps still not enough to precipitate a 10% rally given the neutral call. Notably, the shares opened on the Toronto exchange at around CAD$25, so the price update might just be an effort to catch up with the market.
Image source: Getty Images.
That said, Teck produces coal, zinc, and copper. Zinc and copper were both moving notably higher today. So while Goldman's updated price target may have helped, Teck's stock rally was probably at least partly related to a more basic function of its business. Which, in the end, makes a great deal of sense given that the miner's top and bottom lines are tied to the prices of the commodities it produces.
Now what
While it isn't clear if Goldman Sachs or rising commodity markets were responsible for Teck's sizable price advance today, both are possible "culprits." Combined, they could easily have put investors in a buying mood. That said, long-term investors probably shouldn't read too much into one day's move, noting that Teck's shares are already trading fairly close to Goldman's target and commodity prices can be volatile.
