The logo of Foxconn, the trading name of Hon Hai Precision Industry, is seen on top of the company's headquarters in Tucheng, New Taipei city, December 24, 2013. Foxconn's BlackBerry Ltd deal marks the Taiwanese firm's biggest step up the value chain - a chance to not just assemble smartphones, but help design them, too.PICHI CHUANG/Reuters
The theft of data from up to 40 million credit and debit cards belonging to Target Corp. shoppers has resulted in a lowered profit forecast by brokerage Cowen and Co.
While Target's shares have fallen just 3 per cent since the data theft was revealed, the breach over the holiday season was likely to drive away customers and impact margins as the retailer increases discounts, says the brokerage.
Cowen and Co. cut its fourth-quarter profit forecast to $1.40 per share from $1.52, excluding Target's operations in Canada and one-time items. The retailer has not updated its earnings forecast since the breach was revealed.
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New BlackBerry Ltd. CEO John Chen has a plan to rescue the struggling tech icon, but CIBC World Markets analyst Todd Coupland doesn't see enough to warrant a change in rating or price target just yet.
Mr. Coupland says he likes Mr. Chen's recently announced plan to transform Blackberry from a failed smartphone brand to a sustainable, enterprise security-focused company. He points out the new five-year agreement with Foxconn that will shift some hardware manufacturing, design and inventory costs.
"While John Chen has outlined some positive first steps, we are taking a wait-and-see approach on the uptake of BB10 corporate devices," says Mr. Coupland. "Key points to watch for include U.S. smartphone market share, MDM [Master Data Management] uptake and BBM monetization."
Mr. Coupland is maintaining his "sector underperformer" rating and $5 price target.
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Raymond James Ltd. analyst Frederic Bastien says Brookfield Infrastructure Partners L.P. – his best pick for 2014 – has hit the ground running after a major announcement yesterday.
Brookfield (BIP) said Monday it will invest with institutional partners to acquire from Vale a 26.5 per cent stake in VLI, one of Brazil's largest rail and port logistics businesses, for about $850-million. BIP's share is pegged at $350-million.
According to Mr. Bastien, three favourable aspects of the deal stand out:
An asymmetrical risk profile:
He believes BIP's investment in VLI has limited downside risk given the guaranteed returns put in place, along with a tremendous upside potential as customers make use of VLI's excess capacity and expansion opportunities are harnessed.
A favourable supply-side dynamics theme:
Mr. Bastien believes many assets are poised to change hands in the near term as resource companies look to monetize assets they no longer view as strategic to their business and/or strengthen their balance sheets.
An increased presence in Brazil:
Brookfield knows this market "inside out, with strong long-term GDP prospects," he says.
"We selected BIP as one of Raymond James Ltd.'s Best Picks for 2014 because we believe the partnership will accelerate its asset acquisition program now that its 2013 capital recycling program freed up tons of cash," says Mr. Bastien. "Based on this premise and our view that the partnership can meet the bulk of its annual CDPU growth goal of 5 per cent-9 per cent organically, we strongly believe the units should be bought."
He is maintaining his "outperform" rating and $44 (U.S.) price target.