Yogawear retailer Lululemon Athletica Inc's logo is pictured at its store in downtown Vancouver June 11, 2014.BEN NELMS/Reuters
Inside the Market's roundup of some of today's key analyst actions. This file will be updated often during the trading day so check back for new details.
Lululemon Athletica Inc. faces headwinds from the three C's, says Goldman Sachs.
Competition, Canada, and the currency pose problems for the company, according to analyst Lindsay Drucker Mann.
"Sales in LULU's Canadian business (~25% of sales) have stalled, with the store fleet fully built and flattish comps over the last few years," the analyst wrote. "We believe consensus underestimates the negative margin impact from the Canadian dollar devaluation; we estimate a -500 basis point earnings before interest and taxes impact."
Increased competition in the yoga attire space, said Ms. Mann, will also weigh on the company's market share. As such, she sees the current stock price as reflecting unrealistic growth assumptions for the brand.
The analyst downgraded the stock to "sell" from "neutral" and maintained a $53 (U.S.) target price.
The average analyst price target is $63.52.
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Analysts are lowering their expectations for SNC-Lavalin Group Inc. Dundee Capital Markets Inc. analyst Maxim Sytchev is maintaining his "buy" rating but cutting his target. Benoit Poirier, analyst at Desjardins Securities Inc. is doing the same, while BMO Nesbitt Burns took the issue further, downgrading SNC to "market perform" from "outperform."
SNC's forecasts for 2015 engineering and construction earnings per share are the main drag on analyst targets.
"2015 EPS guidance of C$1.30 to $1.60 for the E&C segment was disappointing, and well below our forecast and consensus of $2.26," Mr. Poirier said.
SNC also reiterated its intention of selling its stake in Highway 407. Mr. Poirier values the stake at $14.99 per share and expects further developments on the possible sale this year. Selling off its infrastructure concession investments and refocusing efforts on its core business is one of the strategies of SNC's new management team, led by CEO Robert Card.
Mr. Sytchev lowered his target price to $52 from $61, Mr. Poirier to $50 from $56, while BMO Nesbitt Burns set its new target to $40. Consensus price is $54.02.
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Sentiment toward Google Inc. has "soured as investors question its competitive position," according to Citigroup Global Markets Inc. analyst Mark May. The analyst feels the risks to the company are overinflated, however. He maintained his "buy" rating on the stock.
One of the most significant questions hanging over Google is the outlook for its dominant position in the search business. Desktop searches represent about 60 per cent of Google's gross revenue. With searches poised to decline on increasing mobile app use, Google will need to create a strong presence on the mobile web to offset potential losses.
Google's competitors will no doubt be moving to consolidate mobile market share as well. Mr. May thinks Facebook Inc.'s people-based approached to search and ad-platforms represent a real threat, but that "this will play out over time."
Analysts are also divided about a possible return of capital to investors from Google. Mr. May sees a limited upside to a buyback, but thinks "a dividend might make sense."
The analyst hiked his price to $682 from $629. The consensus is $636 according to Bloomberg data.
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In other analyst actions:
Canadian Natural Resources Ltd. was upgraded to "buy" from "market perform" at Cormark Securities. The 12-month target price is $45 (Canadian) per share.
Baytex Energy Corp. was upgraded to "buy" from "hold" at Desjardins Securities. The 12-month target price is $23.50 (Canadian) per share.
Sprott Inc. was lowered to "hold" from "buy" at TD Securities. The 12-month target price is $3 (Canadian) per share.
Aecon Group Inc. was reduced to "market perform" from "outperform" at BMO Nesbitt Burns. The 12-month target price is $12 (Canadian) per share.
Actavis was rated new "buy" at Edward Jones.
Midway Gold Corp. was downgraded to "hold" from "buy" at Jacob Securities. The 12-month target price is 90 cents (Canadian) per share.
Pharmacyclics Inc. was downgraded to "market perform" from "market outperform" at JMP Securities and was downgraded to "market perform" from "outperform" at Wells Fargo.
George Weston Ltd. was downgraded to "hold" from "buy" at Octagon. The 12-month target price is $106 (Canadian) per share.
AcuityAds Holding Inc. was rated new "speculative buy" at Beacon Securities. The 12-month target price is $1.60 (Canadian) per share.
Canfor Corp. was downgraded to "sector perform" from "outperform" at RBC Capital. The 12-month target price is $30 (Canadian) per share.
Journey Energy Inc. was rated new "buy" at Acumen Capital. The 12-month target price is $6.50 (Canadian) per share.
Kelt Exploration Ltd. was rated new "outperform" at Raymond James. The 12-month target price is $9.50 (Canadian) per share.
Norbord Inc. was raised to "outperform" from "sector perform" at RBC Capital. The 12-month target price is $30 (Canadian) per share.
TransGlobe Energy Corp. was raised to "buy" from "hold" at Paradigm Capital. The 12-month target price is $5.50 (Canadian) per share.
Toro Oil & Gas Ltd. was rated new "outperform" at National Bank. The 12-month target price is 90 cents (Canadian) per share.
Abraxas Petroleum Corp. was raised to "buy" from "hold" at Canaccord Genuity. The 12-month target price is $3.75 (U.S.) per share.
Citigroup Inc. was raised to "outperform" from "market perform" at Keefe Bruyette. The 12-month target price is $61 (U.S.) per share.
Skullcandy Inc. was raised to "buy" from "fairly valued" at CRT Capital. The 12-month target price is $13 (U.S.) per share.
With files from Bloomberg News