The Enbridge Tower on Jasper Ave., Edmonton.DAN RIEDLHUBER/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.
Enbridge Inc. no longer offers substantial upside after a 9 per cent rally year-to-date, said Credit Suisse in downgrading the stock Thursday.
The pipeline company has far outperformed competitor TransCanada Corp. since announcing plans to "drop down" its Canadian liquids pipeline business into the Enbridge Income Fund.
The filing of a circular for this transaction will likely come in early June, said analyst Andrew Kuske.
Mr. Kuske believes Enbridge has "significant and visible growth until 2018," but its prospects after that are "less clear" and would likely require mergers and acquisitions.
He lowered the stock to "neutral" from "outperform" and maintained a $70 (Canadian) price target.
The average analyst price target is $65.63.
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Unlike its peers, Metro Inc. is not distracted by "integrations or systems or special projects or multiple businesses," said CIBC World Markets analyst Peter Caicco.
Metro beat Mr. Caicco's second-quarter forecasts on sales, earnings per share and earnings before interest, taxes, depreciation, and amortization. It reported a 4.5-per-cent increase in same store sales, and a rise in total revenue of 6 per cent to $2.7-billion (Canadian)
"They are simply operating carefully, steadily improving their core offering in a very good grocery market," Mr. Caicco said.
He raised his price target to $37.50 from $33.33. The analyst maintained his "sector performer" rating.
Metro was also raised to "buy" from "hold" at Desjardins Securities. The analyst consensus price is $35.23, according to Thomson Reuters.
The analyst maintained his "sector performer" rating.
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DHX Media Ltd.'s loss of Disney content won't have a massive impact on earnings, according to National Bank Financial.
The Family Channel will see a drop-off in subscribers, said analyst Adam Shine, but DHX's reprogramming will produce $5 to $7-million in savings and the company will likely receive approval to introduce advertising by the third quarter of 2017 at the latest, which will help mitigate any damage.
"We estimate that the licensing fee of approximately $28-million was poised to increase to or above $40-million and DHX wasn't prepared to pay this materially elevated rate," said Mr. Shine. "Management appears to believe that the loss of Disney can be managed so as to have no effect on its TV earnings before interest, taxes, depreciation, and amortization levels notwithstanding the inevitable prospect of lost revenues."
As such, the sell-off in the shares provides a buying opportunity, with the analyst seeing 16.5 per cent upside from current levels.
Mr. Shine is singing a similar tune as TD Securities analyst Bentley Cross, who also indicated that the loss of Disney content wouldn't have as significant an impact as the market had priced in when upgrading the stock last week.
National Bank Financial upgraded the stock to "outperform" from "sector perform" and maintained a $9.50 (Canadian) price target.
The average analyst price target is $9.76.
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The lone cause for concern in the first quarter results for Boeing Co. was a negative free cash flow of $486-million (U.S.), compared to a positive one of $615-million during the same period in 2014, said Canaccord Genuity analyst Ken Herbert.
He pointed to advance payments as the cause of the swing in free cash flow, as approximately 35 per cent to 40 per cent of aircraft are paid for through pre-delivery deposits.
"While the company anticipates that advances will be basically flat in 2015 over 2014, Q1/15 was negatively impacted by lower P-8 [aircraft] advances (a significant part of the strong Q1/14), slightly lower orders, and the 2014 pull forward," Mr. Herbert said.
The company reported an adjusted earnings per share of $1.97 (U.S.), beating the consensus forecast of $1.81. Its margins were also better than expect across all segments.
Despite the strong results, Boeing did not alter its 2015 guidance, and expects an improved cash flow in the second half of the year. Mr. Herbert points out margins could be tested with increase research and development costs and stepped up deliveries of its 787 and 747-8 aircraft.
The analyst raised his price target to $165 from $160 (U.S.) and maintained a "buy" rating. The consensus price target is $161.11.
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UBS analyst Eric Sheridan thinks interest in eBay Inc. could be stimulated by positive momentum from the company's first quarter results, raising the company from "the doldrums" that has hurt share performance since 2013.
On Wednesday, the e-commerce company reported higher-than-expected profits as revenue grew from its payments business by 14 per cent, including PayPal, which the company is planning to spin off. It reported a net income of $626-million (U.S.), or 51 cents per share, for the first quarter compared with loss a year earlier. Net revenue rose 4.4 per cent to $4.45-billion.
Mr. Sheridan sees four potential catalysts for investors: a separation of the company's businesses in the third quarter; a better-than-expected margin profile; capital allocation announcements that could drive shareholder returns; and the potential for improving marketplace revenues.
He maintained his "buy" rating and raised his price target to $64 (U.S.) from $62. The analyst consensus is $59.64.
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In other analyst actions:
Angie's List Inc (ANGI-Q) was downgraded to "underperform" from "market perform" at Northland Securities by equity analyst Darren Aftahi. The 12-month target price is $5.50 (U.S.) per share.
Citrix Systems Inc (CTXS-Q) was downgraded to "hold" from "buy" at Evercore ISI by equity analyst Stewart Materne. The 12-month target price is $67.00 (U.S.) per share.
F5 Networks Inc (FFIV-Q) was raised to "buy" from "hold" at Needham & Co. by equity analyst Alexander Henderson. The 12-month target price is $140 (U.S.) per share.
Informatica Corp (INFA-Q) was downgraded to "market perform" from "market outperform" at JMP Securities by equity analyst Patrick Walravens.
Perrigo Co PLC (PRGO-N) was downgraded to "market perform" from "outperform" at William Blair by equity analyst Jon Andersen.
Perseus Mining Ltd (PRU-T) was raised to "buy" from "market perform" at Cormark Securities by equity analyst Mike Kozak. The 12-month target price is 50 cents per share.
Time Warner Cable Inc (TWC-N) was raised to "buy" from "hold" at Jefferies by equity analyst Michael Mccormack. The 12-month target price is $193 (U.S.) per share.
Potash Corp. was upgraded to "buy" from "hold" at HSBC.
A trio of drilling firms were downgraded by Morgan Stanley. Transocean Inc., Ensco PLC, and Noble Corp. were all cut to "underweight" from "equal weight."
Texas Instruments Inc. was lowered to "neutral" from "buy" at Bank of America.
Agrium Inc (AG-N) was raised to "outperform" from "sector perform" at Alta Corp Capital by equity analyst John Chu. The 12-month target price is $125 (U.S.) per share.
Ithaca Energy Inc (IAE-T) was downgraded to "hold" from "buy" at Mackie Research Capital by equity analyst Bill Newman. The target price is $1.40 (Canadian) per share.
Pilot Gold Inc (PLG-T) was rated new "outperform" at Macquarie by equity analyst Michael Gray. The 12-month target price is $1.50 (Canadian) per share.
Tribute Pharmaceuticals Canada Inc (TRX-T) was rated new "buy" at Octagon by equity analyst Robert Gibson. The 12-month target price is $1.60 (Canadian) per share.
With files from Bloomberg News