The U.S. FDA said Monday that it was investigating reports of five deaths that may be associated with Monster Beverage Corp.’s energy drink.Steve White
Inside the Market's roundup of some of today's key analyst actions. This file will be updated during the trading day. For breaking analyst actions prior to market open every day, read our Before the Bell morning report.
RBC Dominion Securities has upgraded Monster Beverage Corp. to a "top pick" rating after becoming increasingly convinced that its U.S. sales volumes are poised to improve in 2014.
RBC initiated coverage on the stock just last month with an "outperform" rating, but since then, analyst Nik Modi has become more confident in his above-consensus volume estimates for 2014. He cited three reasons for this: better-than-expected volume growth in convenience store sales data tracked by Nielsen; signs of increasing traction in Brazil; and more appreciation for the Monster brand name's ability to expand into other beverage segments outside of energy drinks.
"While the timing of Monster's international rollout creates choppy results on a quarterly basis, we continue to see significant long-term opportunities," Mr. Modi said in a research note. "Monster (the same size as Red Bull in the US) is about 1/10th the size of Red Bull outside the US. Monster has launched in many of the biggest international markets and, as they build scale and local production (Japan, India, Brazil), should shortly be turning profitable. Importantly, feedback from our contacts suggest Monster is gaining traction with consumers in Brazil."
He maintained a $77 (U.S.) price target. The average target among analysts is $66.45 (U.S.), according to Thomson Reuters.
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JPMorgan analyst Mark Moskowitz upgraded Hewlett-Packard Co. to "overweight" from "neutral," believing that challenges are "easing" for the tech giant.
Mr. Moskowitz, who also raised his price target to $35 (U.S.) from $30, said the personal computer market appears to be stabilizing and there also are signs of improvement in the printer market. He sees potential for HP surpassing its fiscal year 2014 forecast for free cash flow of $6-billion to $6.5-billion.
The average Street target is $26.94.
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Several analysts today are hiking their price targets on Pembina Pipeline Corp. after it announced on Monday a $2-billion (Canadian) expansion of its regional pipeline network in Western Canada.
The 540-kilometre "Phase III expansion" will follow and expand upon Pembina's existing systems from Taylor, B.C., to Edmonton and there are contracts in place with shippers for 75 per cent of the initial capacity.
"We see significant EBITDA upside should Pembina: 1) contract the remaining capacity, 2) expand the system to its 500 kbbls/d ultimate capacity, 3) build new laterals and tie-ins, and 4) increase the design capacity before ordering long-lead items in Q3/14," said CIBC World markets analyst David Noseworthy. He raised his price target to $39 (Canadian) from $36 and reiterated a "sector outperform" rating.
RBC Dominion Securities analyst Robert Kwan raised his price target to $42 from $40 and maintained an "outperform" rating. "We view the attractive returns from the larger-than-expected Phase III conventional pipeline expansion as a positive for the stock, particularly given some uncertainty around the expansion (and the associated economics) due to competition for the project," he said.
The average analyst target is $37.27.
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CIBC World Markets analyst Cosmos Chiu is increasing his price target for Franco Nevada Corp. in light of its recently announced royalty stream acquisition of Teranga Gold's operations.
"This stream will provide FNV with immediate cash flow, and FNV has downside protection as the ongoing cost component is calculated as 20 per cent of the spot price of gold," says Mr. Chiu. "We calculate a favourable payback period for FNV's investment of between five to six years."
Longer-term, Mr. Chiu expects the Teranga stream to generate organic growth for Franco Nevada.
He increased his price target from $49 (Canadian) to $51 and maintained a "sector outperformer" rating. The average analyst target is $47.26.
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World-class terrain and a solid global brand have CIBC World Markets analyst Mark Petrie increasing his price target for Whistler Blackcomb Holdings Inc.
Despite the stock's two-year bull run that has left it trading at record highs, Mr. Petrie believes the yield of 6.0 per cent is safe and attractive within his coverage list.
He raised his price target to $17 (Canadian) from $15 and maintained his "sector performer" rating. The average Street target is $17.
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In other analyst actions:
Goldman Sachs downgraded Catamaran to "neutral" from "buy" and cut its price target to $50 (U.S.) from $61.
Atlantic Equities downgraded Twitter to "neutral" from "overweight" and raised its price target to $50 (U.S.) from $34.
Susquehanna upgraded Facebook to "positive" from "neutral" and raised its price target to $68 (U.S.) from $52.
Canaccord Genuity hiked its price target on Herbalife to $87 (U.S.) from $77 and reiterated a "buy" rating. SunTrust Robinson Humphrey raised its target to $85 (U.S.) from $78.
JPMorgan upgraded Western Digital to "overweight" from "neutral" and raised its price target to $100 (U.S.) from $56.
JPMorgan downgraded Century Aluminum to "underweight" from "neutral" and cut its price target to $6 (U.S.) from $9.
Citibank raised its price target on Yahoo to $46 (U.S.) from $39 and maintained a "buy" rating.
UBS raised its price target on Avago Technologies to $60 (U.S.) from $44 and maintained a "buy" rating.
Credit Suisse downgraded SunCoke Energy to "neutral" from "outperform" and maintained a $19 (U.S.) price target.
Credit Suisse raised its price target on FedEx to $135 (U.S.) from $115 and maintained a "neutral" rating.
Canaccord Genuity raised its price target on Valeant Pharmaceuticals International to $119 (U.S.) from $115 and maintained a "buy" rating.
M Partners hiked its price target on Lake Shore Gold to $1.05 (Canadian) from 75 cents and reiterated a "buy" rating.
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(Includes correction to CIBC target on Pembina Pipeline)