The arrival of the 787s is part of a strategy that will allow Air Canada to cut its costs.
Inside the Market's roundup of some of today's key analyst actions. This file will be updated during the trading day.
Cott Corp. is "a tough, well-managed company in a bad market," said CIBC World Markets analyst Perry Caicco, after the soft-drinks maker reported fourth-quarter earnings that missed his estimates.
"Although we are lowering our volume and earnings before interest, taxes, depreciation and amortization forecasts in 2014, Cott still should generate $85-million to $100-million of cash, and possibly more in 2015," he wrote in a research note. "The 2018 notes should be re-financed this year, the balance sheet de-levered, and Cott should begin to return cash to shareholders."
Target: Mr. Caicco rates the stock "sector outperformer" and lowered his price target to $10 from $11. The analyst consensus price target over the next year is $10.07, according to Thomson Reuters.
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Investors should sell Air Canada shares after the fourth quarter showed "massive seasonal fluctuations" in its operating margin and a "notable" drop in revenue per available seat mile, said Raymond James analyst Ben Cherniavsky.
"All airlines confront this dilemma to some degree, but seasonality seems to confound Air Canada with particular vengeance," he said. "Until this variable becomes less influential, we believe the company's stock will be prone to sizable volatility around each quarter, which makes for good trading opportunities."
He also expressed concern over the airline's strategy for its Rouge line, the impact of a volatile Canadian dollar, an accelerating capital spending cycle and management's "very tepid" first-quarter outlook.
Target: Mr. Cherniavsky cut his target price to $5.00 from $8.00 and the stock's rating to "underperform" from "market perform." The analyst consensus price target over the next year is $9.48, according to Thomson Reuters.
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Peyto Exploration & Development Corp. stock is pricing in most of the resource company's near-term growth, said Canaccord Genuity analyst Steve Toth.
"We have grown accustomed to Peyto's stable and consistent results," Mr. Toth said. Its year-end reserves grew 19 per cent, with production growth outpacing reserves but still providing "plenty of running room," he said. "It reported solid finding, development and acquisition costs again and demonstrated consistency within its future development costs and average booked reserves per undeveloped well."
Target: Mr. Toth rates the stock "hold" and increased his target to $39.00 from $38.00. The analyst consensus price target over the next year is $37.26.
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Mosaic Corp. stock is poised to benefit from a recently announced share buyback and from its strong phosphate segment, said RBC Capital Markets analyst Andrew Wong.
"We expect the base business to benefit from lower input costs, higher volumes, offsetting lower prices and the pending acquisition of CF's assets. More importantly, we think the benefits are sustainable beyond 2014 given our lower outlook for input costs and a tightening phosphate market outlook," he wrote in a research note.
Target: Mr. Wong rates the stock "outperform" and has a $57 (U.S.) price target. The analyst consensus price target over the next year is $48.74.
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Sun Life Financial Inc. had a "solid" fourth quarter, with core earnings per share ahead of expectations, said Desjardins Securities analyst Doug Young.
"While it was a messier-than-expected quarter, we remain comfortable with the underlying earnings power of the company's core operations," he wrote in a research note. The insurer's MFS U.S. asset management franchise had a strong quarter, as did its U.S. insurance and Asian operations, he said.
Target: Mr. Young raised his price target to $43 from $42 (Canadian) and rates the stock "buy." The analyst consensus price target over the next year is $38.82.
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