Under chief executive Murad Al-Katib, Alliance Grain Traders Inc. has expanded to become a food-products company.Troy Fleece/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.
BRP Inc.'s new G2 outboard engine platform provides the company with a springboard to gain market share, and investors should see its current stock price as a buying opportunity, said Desjardins Securities analyst Benoit Poirier.
The new platform targets the high-power segment and offers impressive specifications, including 15 per cent better fuel efficiency and 20 per cent more torque than leading four-stroke engines, Mr. Poirier wrote in a research note.
"If the G2 family can help BRP grow its market share to 14 per cent (from 9 per cent) in the longer term, we calculate it could contribute incremental revenue of $26-million to $29-million. Overall, we believe this announcement reinforces our view that BRP is a compelling growth play in the powersports market as it is built on a history of innovation and operational efficiency."
Mr. Poirier rates the stock "buy" and has a $35 price target on the stock. The analyst consensus price target over the next year is $33.91, according to Thomson Reuters.
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Alliance Grain Traders is likely to continue to improve its margins as it shifts its product mix and reaps economies of scale, Raymond James analyst Steve Hansen said.
"We continue to recommend AGT shares based upon the firm's robust core pulse platform, sustained internal efficiency gains, and long-term strategy aimed at layering on complementary, high-growth/margin businesses in the food ingredient sector," he wrote in a research note.
The agribusiness's production and expansion plans at its Minot, North Dakota, facility are on schedule, and the company's capacity for starch output is largely sold out, after facing early challenges, he noted.
Mr. Hansen rates the stock "outperform" and has $23 target price. The analyst consensus price target over the next year is $21.19.
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Canadian Natural Resources Ltd. "remains a strong free cash flow story" and could reward investors with share buybacks and a dividend increase over the next 12 months, said Canaccord Genuity analyst Phil Skolnick.
Pricing for heavy oil, about 40 per cent of CNRL's output, is likely to improve this year and overall production growth will continue, he noted. The company is also due to make a decision on monetizing its royalty stream in the third quarter and is likely receive approval on its Primrose operations, he said.
Mr. Skolnick rates the stock "buy" and has a $54 price target. The analyst consensus price target over the next year is $49.18.
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CT Real Estate Investment Trust will continue to benefit from long-term contracts ensuring future stability and growth, CIBC World Markets analyst Alex Avery said.
"We believe it offers investors a highly predictable and attractive source of income, with consistent, long-term growth prospects," Mr. Avery said.
Canadian Tire is both the controlling shareholder and principal tenant of CT REIT, accounting for 83 per cent of its share ownership and 97 per cent of its rent.
Canadian Tire leases have an average term of 15.7 years, and include annual rent increases of 1.5 per cent, Mr. Avery said.
Mr. Avery initiated coverage of CT REIT with a "sector performer" rating and a $12 (Canadian) price target. The analyst consensus price target over the next year is $11.61, according to Thomson Reuters.
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Coming out of a major period of expansion, Northland Power Inc.'s finances are stabilizing, CIBC World Markets analyst Paul Lechem said.
And although the company has assumed a 60 per cent stake in the $4.2-billion (Canadian) Gemini offshore wind project in the Netherlands, the project is consistent with Northland's strategy, Mr. Lechem said.
"While Gemini presents some shorter-term financial headwinds and adds development risk, we believe these issues are manageable and that risks are adequately mitigated," he said.
Mr. Lechem is initiatiating coverage of Northland with a "sector outperformer" rating and a $21 price target. The analyst consensus price target over the next year is $18.22, according to Thomson Reuters.
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In other analyst actions today:
Jennings Capital is initiating coverage on DHX Media Ltd. with a "buy" recommendation and a price target of $7.50 (Canadian).
Canaccord Genuity initiated coverage on Donnycreek Energy with "speculative buy" rating and a $4.50 (Canadian) price target.
National Bank Financial initiated coverage on New Look Eyewear with an "outperform" rating and a $23.50 (Canadian) price target.
CIBC World Markets cut its rating on Lumina Copper to "sector performer" from "sector outperformer" and cut its price target to $10 (Canadian) from $15.
Jennings Capital initiated coverage of Ballard Power Systems with a "buy" rating and a $4 (U.S.) price target.
RBC Dominion Securities raised its price target on Baytex Energy to $53 (Canadian) from $52 and maintained an "outperform" rating.
Canaccord Genuity raised its price target on First Quantum Minerals to $27 (Canadian) from $26 and maintained a "buy" rating.
National Bank Financial raised its price target on Manac Inc. to $11 (Canadian) from $10 and maintained an "outperform" rating.