A skier makes his way down Blackcomb Mountain in Whistler Dec. 7, 2013.John Lehmann/The Globe and Mail
Inside the Market's roundup of some of today's key analyst actions. This file will be updated during the trading day.
An unusually cold winter is not working in the favour of ski resorts operator Whistler Blackcomb Holdings Inc., according to Mark Petrie of CIBC World Markets.
Snowfalls are at a 25-year-low at the company's resort in the Coast Mountains, hurting sales in the first quarter, which accounts for about 30 per cent of total lift revenues. Whistler Blackcomb is expected to report a 2-per-cent drop in visitors in the three months ending Dec. 31.
Higher prices for lift tickets should more than offset the drop in sales, but Mr. Petrie said he is neutral on the company's shares given the uncertain weather.
"Given the uncommon start, we have updated our forecast to reflect more modest expectations for skier visits in Q1 and Q2," he said. "We now expect Q1 revenues to rise 2.5 per cent, driven by 4.5 per cent higher prices and 2 per cent fewer skier visits. Q2 visits are reduced by 1 per cent, but this is still highly uncertain."
Target: Mr. Petrie maintained a 12-month share price target of $17 with a rating of "sector performer." The average price target of analysts surveyed by Thomson Reuters is $17.25.
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A recovering U.S. housing market, solid Asian demand and tight Canadian supplies of timber make stock in forest product companies attractive, Raymond James analyst Daryl Swetlishoff says.
Investors in the Canadian sector are also poised to benefit from a lower dollar that should boost lumber exports and strong free cash flow, he said.
Canfor Corp., West Fraser Timber and Domtar are standouts in the group, rated "outperform." Conifex Timber Inc. and International Forest Products Inc. are rated "strong buys."
"We continue to advocate investors take advantage of expected volatility this year by adding to positions on potential pullbacks with a view to being overweight lumber stocks heading into 2015," Mr. Swetlishoff said in a research note.
Target: The analyst consensus price target for Canfor over the next year is $28.14, according to Thomson Reuters.
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Hudson's Bay Co.'s decision to sell its downtown Toronto location for $650-million should give it money to repay debt as well as latitude to pursue expansion and growth plans, Canaccord Genuity analyst Derek Dley said.
"Although the fourth quarter of 2013 appears challenging, given both a heavily promotional environment and very unfavorable weather, HBC remains committed to reducing excess selling, general and administrative costs and leveraging the recent acquisition of Saks," he wrote in a research note. "Meanwhile, we believe investors will be rewarded through further monetization of HBC's significant real estate assets during 2014."
Target: Mr. Dley rates the stock "buy" and increased his target price to $22.50 from $21.00. The analyst consensus price target over the next year is $21.44, according to Thomson Reuters.
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Emera Inc.'s recent investment in power transmission raises questions over its need to raise equity, Credit Suisse analyst Andrew Kuske said.
"We continue to believe that Emera is undergoing a fairly significant transformation with a substantial amount of future capital being allocated to highly visible transmission projects with a very long duration," he wrote in a research note. "We do not believe a great understanding exists regarding the potential network benefits, greater balance sheet flexibility and the future redeployment opportunities" associated with the investment, he said.
Target: Mr. Kuske rates the stock "outperform" and has a $36 target price. The analyst consensus price target over the next year is $34.39, according to Thomson Reuters.
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Kimberly Clark Corp. shows momentum in organic sales and solid international growth, but its stock is fairly valued at present and investors should wait for a more attractive entry point, said BMO Capital Markets analyst Connie Maneaty.
"The KMB story has a lot to like," Ms. Maneaty wrote in a research note, citing organic sales growth rates that are among the best in their class, stable or increasing market shares in various countries, sustainable cost savings of at least $250-million (U.S.) a year and an improving return on invested capital.
Its recent performance and likely continued strong performance warrants a price-to earnings multiple of 18 times, which is closer to that of other large consumer multinationals, such as Procter & Gamble's 20-times multiple, she said.
Target: Ms. Maneaty rates the stock "market perform" and raised her price target to $111 from $105. The analyst consensus price target over the next year is $107.56, according to Thomson Reuters.