Kinross Gold Corporation profit was hit by lower gold prices.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 Tony Lesiak has turned bullish on Kinross Gold Corp., believing the stock is trading inexpensively to peers - especially given an expected improvement in cash flows over the next two years.
He upgraded his rating to "buy" from "hold" and increased his price target to $7 (Canadian) from $5.50.
Mr. Lesiak noted that Kinross has slashed spending and its reserves have been optimized to maximize near-term cash flow. Meanwhile, the company's strong operating track record and prudent management of its resources positions the company for some of the industry's best leverage to gold.
Kinross stock has underperformed its larger peers by 4 per cent year to date, and by 10 per cent over the last three months, he noted. By his estimates, the company is trading at a 6 per cent discount relative to peers based on net asset value.
"On profitability metrics, Kinross is the most inexpensive gold producer under coverage, trading at a 48 per cent discount to the peer average on estimated 2014 price to cash flow and 47 per cent on enterprise value/earnings before interest, taxes, depreciation and amortization," he said in a research note.
This steep discount can be partly explained by the company's shorter reserve life compared to many peers, and expectations that production will dive in 2020 as some of its mines end operations.
"At spot gold, we see Kinross in a net cash position in 24 months. The key detraction is the 2020 production cliff. However, recent exploration success has the potential to be meaningful, and at some point there is opportunity in merger and acquisitions," he said.
The analyst consensus price target for Kinross over the next year is $6.31, according to Thomson Reuters.
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Several research houses initiated coverage on Intrawest Resorts Holdings Inc. today, providing a cautious but generally favourable outlook for the operator of ski resorts.
Goldman Sachs and Deutsche Bank both assigned "hold" ratings to Intrawest shares, with price targets of $15 (U.S.) and $13, respectively.
"In our view, Intrawest has the potential to grow organic revenue above the industry, acquire several smaller privately owned resorts and benefit from its affluent customer base," Goldman Sachs analyst Afua Ahwoi said. "However, at current valuation levels, we believe these positives are balanced out by the lack of clarity around SNOW's execution against some of these opportunities, the dramatic seasonality of the mountain resort business, and the elevated leverage versus peers." Deutsche Bank issued similar comments, suggesting several positives are already reflected in the current share price.
But KeyBanc initiated coverage with a "buy" rating, JMP Securities with a "market outperform" rating, and Credit Suisse with an "outperform" rating. All three set a $17 price target.
Intrawest, which had went private in 2006, premiered again on the stock exchange earlier this year, fetching an initial public offering price of $12 (U.S.).
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Tesla Motors Inc. has the opportunity to become much more than a car company, according to Morgan Stanley analyst Adam Jonas, who more than doubled his price target.
Shares of Tesla Motors surged more than 18 per cent on Tuesday after Mr. Jonas wrote about Tesla's plan to become a leader in the development of battery packs.
"Tesla's quest to disrupt a trillion-dollar car industry offers an adjacent opportunity to disrupt a trillion-dollar electric utility industry," said Mr. Jonas. "If it can be a leader in commercializing battery packs, investors may never look at Tesla the same way again."
The remarks follow an announcement from Tesla saying it plans to create the largest Li-ion battery pack facility in the world and create a new "gigafactory", combining all elements of battery production.
Morgan Stanley expects Tesla's 2013 revenue of $2.5-billion (U.S.) to increase more than ten-fold by 2016, 30-fold by 2020 and 60-fold by 2028.
Mr. Jonas jacked up his price target to $320 (U.S.) from $153 and maintained his "overweight" rating. The analyst consensus price target over the next year is $197.55, according to Thomson Reuters
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Lumber producer Conifex Timber Inc. is poised for further growth and has earned a price target hike from CIBC World Markets analyst Mark Kennedy.
He revised his estimates for Conifex's 2014 earnings before interest, taxes, depreciation and amortization upward to $47.5-million from $46.1-million. He also raised his estimates for 2015 EBITDA to $71.7-million from $69-million. The better 2015 outlook is due to assumed capacity growth at the Mackenzie mill site, said Mr. Kennedy.
"The construction of the bioenergy plant is underway with start up expected in Q4/2014," he writes in a research note. "Conifex is now evaluating sawmill plans with potential for a significant capacity expansion at the Mackenzie site if additional fiber rights are secured. It is the most inexpensive lumber name we follow."
Mr. Kennedy maintained his "sector outperformer" rating and boosted his price target to $13 from $11. The analyst consensus price target over the next year is $11.58, according to Thomson Reuters.
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The conclusion of a power purchase agreement between Alderon Iron Ore Corp. and Newfoundland and Labrador Hydro is good news for Alderon, but not enough to warrant a rating change, according to Desjardins Securities analyst Jackie Przybylowski.
Ms. Przybylowski notes that the conclusion of the agreement is one of three milestones Alderon has achieved since the beginning of 2014. The others were the release from the provincial and federal environment assessment process and the confirmation of a power supply to the Kami site.
"We believe that accomplishing these milestones was an important prerequisite to securing the previously announced debt project financing," she said in a research note. "With the completion of all targets according to the company's previously released timeline, we believe that the project continues to be de-risked, and we are increasingly confident that Alderon will complete its debt and equity project financing within the next few months."
Ms. Przybylowski maintained her "top pick–speculative" rating and $2.75 (Candian) target price. The analyst consensus price target over the next year is $3, according to Thomson Reuters.
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Moody's lowered TransAlta's credit outlook to negative, warning that there is a one in three chance it may downgrade its debt rating following quarterly results that failed to meet its expectations.
Canaccord Genuity upgraded Golden Star Resources to "hold" from "sell" and hiked its price target to $1 (Canadian) from 30 cents.
Goldman Sachs downgraded Pan American Silver to "sell" from "neutral" with a price target of $10 (Canadian) as the bank lowered its silver forecast.
TD Securities reinstated coverage on Baytex Energy and upgraded its rating to a "buy" from a "hold" while raising its price target to $47 (Canadian) from $45.
For more analyst actions, breaking investing news and analysis, follow Darcy Keith on Twitter at @eyeonequities