SHANNON STAPLETON/Reuters
Inside the Market's roundup of some of today's key analyst actions. This file will be updated during the trading day.
Another delay in U.S. approval for the Keystone XL project will translate into only "modest mid-term growth" for TransCanada Corp., said CIBC World Markets analyst Paul Lechem.
"No new timetable has been set, although it appears unlikely to be resolved before year end (and critically, beyond the U.S. midterm elections)," he wrote in a research note.
"Even if approved in 2015, the earliest in service date for the pipeline is late 2016/early 2017, with limited earnings growth in the interim."
Mr. Lechem lowered his target price to $54 from $56, citing "a lower probability of a positive outcome" and cut his rating to "sector performer" from "sector outperformer."
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Canadian Oil Sands Ltd. will benefit from increased exports beyond the United States, particularly because it will profit from a lower Canadian dollar, said Canaccord Genuity analyst Phil Skolnick.
"We expect a significant jump in free cash flow and the dividend next year," he wrote in a research note. "Our 2015 cash flow estimate implies a free cash flow yield of 7.2 per cent."
Assuming that West Texas Intermediate crude trades at $85 (U.S.) a barrel in 2015, "we estimate that COS can essentially maintain its current dividend using only free cash flow to support the dividend," Mr. Skolnick said.
He raised his rating on the stock to "buy" from "hold" and price target to $28 (Canadian) from $21.
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Lululemon Athletica Inc. came across at its analyst day as "a company losing focus, investing in non-core (non-athletic) categories, new demographics (kids, men), and geographies (Europe and Asia)," said Credit Suisse analyst Christian Buss.
"In our view, this seems inappropriate for a brand that has faced significant product flow, quality, and brand communication challenges. We increasingly see risk to industry-leading store productivity and margins. We still view lululemon as a best-in-class brand that has significant global growth potential, but believe that store productivity and margins could remain under pressure, holding back earnings growth," he wrote in a research note.
Mr. Buss has a 12-month target price of $47 and is "neutral" on the stock, saying "caution remains in order."
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After missing many of its medium-term earnings targets over the past few years, Bombardier Inc. is "hitting the re-set button" in an effort to produce more realistic projections, says CIBC World Markets analyst Kevin Chiang.
Mr. Chiang explains that skepticism has seeped into the Bombardier story, and in order to regain investor confidence the company will need to improve upon its execution in both its aerospace and transportation divisions.
"While the long-term opportunities are positive, the question is whether BBD.B will be able to guide its way to this outcome (i.e., double revenue, achieve its margin targets)", he says.
Mr. Chiang maintains his "sector outperform" rating and $4.75 (Canadian) price target. The analyst consensus price target over the next year is $4.25, according to Thomson Reuters.
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RBC Capital Markets analyst Paul Quinn is initiating coverage on Plum Creek Timber Company with an "outperform" rating thanks to the company's exposure an improving U.S. housing market.
"Plum Creek is well-positioned to benefit from a material medium-term rally in Southern log prices as the US housing market recovers, and log constraints in Canada/elevated [Pacific Northwest] log costs drive significant lumber capacity expansion in the South," writes Mr. Quinn, in a research note. "With a strong management team focused on maximizing net present value, we expect a disciplined approach to capital allocation."
Mr. Quinn has put a $47 (U.S.) price target on the stock. The analyst consensus price target over the next year is $45.56, according to Thomson Reuters.