File photo of a First Quantum operation.Reuters
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.
Canaccord Genuity analyst Gary Lampard upgraded First Quantum Minerals Ltd. to "buy" from "hold" on the belief that copper prices could be heading higher over the next couple of years than earlier anticipated.
Mr. Lampard said he increased his cash flow multiples for the company to reflect continued drawdowns in copper inventories on the London Metal Exchange - a signal that demand may be strengthening for the commodity that closely tracks global economic activity.
He predicts average copper prices of $3.30 (U.S.) per pound in 2014 and 2015, but now sees "upside price risks" to that forecast. The spot copper price is currently near $3.23 per pound.
Mr. Lampard raised his price target to $25 (Canadian) from $20.50. The average price target among analysts is $22.11, according to Thomson Reuters.
He also upgraded Capstone Mining Corp. to "buy" from "hold" and boosted its price target to $3.60 (Canadian) from $3.30, also citing prospects that copper prices could surprise to the upside. The average analyst target is $3.56.
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Recent weakness in the Canadian dollar is good news for holding company Onex Corp., given that the majority of its investments are in U.S. dollars, several analysts commented as they raised their price targets on the stock.
Onex reported quarterly results last week that showed strong growth in asset management, as its value of private investments jumped 34 per cent. The net asset value of the company in the fourth quarter was up 18 per cent from a year earlier - or an even more impressive 27 per cent in Canadian dollar terms.
"We view OCX shares as relatively attractive for investors who want leverage to the rising U.S. market, particularly since Onex has significant dry powder available (including cash of $1.7-billion and $3.4-billion uncalled committed capital), and we believe that monetization opportunities have improved," said Canaccord Genuity analyst Scott Chan. He raised his price target to $70.50 (Canadian) from $66 and maintained a "buy" rating.
CIBC World Markets analyst Paul Holden raised his price target to $71 from $64 and reiterated a "sector outperformer" rating, noting the weaker Canadian dollar and the ongoing economic recovery in the U.S. should continue as a tailwind.
The average analyst price target is $61.99.
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Investors looking for a stock that can benefit from the recent surge in natural gas prices, as well as one with strong growth prospects, should take a hard look at Bonavista Energy Corp., said AltaCorp Capital Research analyst Jeremy McCrea.
He upgraded Bonavista to "outperform" from "sector perform" and raised his price target to $19 (Canadian) from $15.
Bonavista's key targets include its Glauconite, Cardium and Wilrich plays, and recent industry data and comments from the company suggest investors should be much more optimistic on Bonavista's prospects, Mr. McCrea said in a research note.
Meanwhile, its production is weighted 63 per cent towards natural gas, and along with its natural gas liquids assets, Bonavista "has some of the highest torque to the improving commodity price environment," he said. He thinks the company's first quarter pricing of sales will exceed most expectations, given that it sells 55 per cent of its gas at daily prices.
"The decline in gas prices over the past few years and the resulting increase in leverage forced management to make substantial changes and improvements to its well economics .... The results of those efforts are now beginning to pay off and we believe the share price has only modestly reflected these changes," he said.
"With higher commodity prices, a decreasing leverage picture and improving well economics (that should provide above average growth), we believe the current valuation doesn't reflect the 'New' Bonavista. With a well respected management team, the company has all the criteria to outperform this year," he added.
The average price target among analysts is $16.15.
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Canaccord Genuity analyst Keith Carpenter is raising his price target on Agrium Inc. despite expected headwinds for the fertilizer maker.
Agrium's adjusted fourth-quarter 2013 earnings per share of $0.79 (U.S.) missed Mr. Carpenter's guidance of $0.80, and he sees a continued oversupply in global potash markets for the next six years. However, he sees good things in Agrium's near-term future.
"There will be further plant outage headwinds in 2014, but we estimate a strong rebound in earnings in 2015, due to significantly higher wholesale sales, lower operating costs in wholesale and further growth expected in the retail segment," he writes in a research note.
Mr. Carpenter maintains his "buy" rating and raised his price target to $107.00 (U.S.) from $106.00.
The analyst consensus price target for Agrium is $99.47.
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The resolution of a conflict between the Fort McKay First Nation and Athabasca Oil Corp. has earned a price target increase from Raymond James analyst Chris Cox.
"On Friday, Athabasca announced that it has reached an agreement with the Fort McKay First Nation whereby the First Nation group has agreed to remove all of its objections as they pertain to the Alberta Energy Regulator's approval of the Dover Commercial project," writes Mr. Cox in a research note.
"We believe Athabasca remains a value story with potential near-term catalysts that could unlock additional value for shareholders. Key of which in our view is the potential for a joint venture agreement relating to the company's Duvernay lands, which we expect could transpire over the coming months."
Mr. Cox maintained his "outperform" rating and raised his price target to $11 (Canadian) from $10. The analyst consensus price target for Athabasca Oil is $9.84.
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In other analyst actions:
TD Securities downgraded Paramount Resources to "hold" from "buy" but hiked its price target to $50 (Canadian) from $46.
CIBC World Markets downgraded Western Forest Products to "sector performer" from "sector outperformer" due to the recent rise in the company's shares, but raised its price target to $3 (Canadian) from $2.70.
Wells Fargo downgraded Halliburton to "market perform" from "outperform" with a price target of $57 (U.S.).
TD Securities cut its price target on Argent Energy Trust to $7.50 (Canadian) from $10.50 and maintained a "hold" rating.
Credit Suisse downgraded Forest Laboratories to "neutral" from "outperform" but raised its target price to $96 (U.S.) from $85.
Goldman Sachs upgraded Baidu to "buy" from "neutral" and raised its price target to $220 (U.S.) from $160.
Needham & Co. raised its price target on Facebook to $80 (U.S.) from $65 and maintained a "buy" rating.
Morgan Stanley upgraded Zillow to "equalweight" from "underweight" and raised its price target to $80 (U.S.) from $77.
UBS cut its price target on Groupon to $8.75 (U.S.) from $11 and maintained a "neutral" rating.
Raymond James upgraded Baker Hughes to "strong buy" from "market perform" with a price target of $80 (U.S.).
For more analyst actions, breaking investing news and analysis, follow Darcy Keith on Twitter at @eyeonequities