Bombardier employees look at the C Series aircraft, after its first test flight in Mirabel, Quebec, September 16, 2013.CHRISTINNE MUSCHI/Reuters
Inside the Market's roundup of some of today's key analyst actions. This file will be updated during the trading day.
A bump in orders for Bombardier Inc.'s C Series aircraft has resulted in at least two ratings upgrades.
Canaccord Genuity analyst David Tyerman has raised his rating to "buy" from "hold" based on a "surprisingly good" C Series order flow at the Farnborough air show, increased focus on improving profitability at Bombardier Aerospace (BA), and the recent decline in BBD's share price.
Mr. Tyerman also hiked his target price to $5.00 (Canadian) from $4.25.
"We think the C Series order flow and BA and Bombardier Transportation (BT) restructuring improve BBD's prospects," says Mr. Tyerman, in a research note. "That, plus our higher target and a lower share price, drove our upgrade. We increased our target on a stronger forecast and our usual one quarter valuation period roll forward."
One caveat is that Bombardier's story may unfold slowly, given the long timeframes of the company's new product strategy and uncertain margin improvement timeframes.
"So, our buy call is best for patient investors," he says.
Raymond James analyst Steve Hansen raised his rating for Bombardier to "outperform" from "market perform," noting that the most severe recent pressures facing the company are expected to ease gradually, and that the recent share price decline presents an attractive, risk-adjusted entry point for long-term investors.
He raised his target price to $4.50 from $4.25.
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Operational challenges and an alarming rate of cash burn have resulted in a downgrade of Maple Leaf Foods Inc. by CIBC World Markets analyst Mark Petrie.
Mr. Petrie notes that while Maple Leaf reported strong second-quarter sales, it burned almost $120-million more cash than he had forecast due to a permanent step-up in working capital.
"Based on this higher run rate, we shave $1 off our valuation," he says. "The company also confirmed that a share buyback is on hold until margins improve (2015)."
Mr. Petrie downgraded Maple Leaf to "sector performer" from "sector outperformer" and cut his price target by a buck to $21 (Canadian).
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Raymond James analyst Phil Russo upgraded Goldcorp Inc. to "outperform" from "market perform" and hiked his price target to $33 (U.S.) from $31.
The action followed the company reporting quarterly gold production and cash costs in line with expectations. The company also reaffirmed its production guidance for the year.
"Capital and project risk surrounding the name continues to abate in our view as we draw nearer to commercial production at Cerro Negro and Éléonore in Q414 and Q115, respectively," Mr. Russo said in a note.
Cerro Negro, located in Argentina, achieved its first gold pour in July and is on track for commercial production in the fourth quarter of this year. Éléonore is located in Quebec and is expected to see production by late this year as well.
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Euro Pacific Canada upgraded Shaw Communications Inc. to "hold" from "sell" and raised its price target to $26 (Canadian) from $25.
The action followed Shaw's announcement this week that it was acquiring ViaWest Inc., one of the largest privately held cloud and managed services providers in North American.
"We view the acquisition of ViaWest positively. We are longstanding bulls on value add data centres and managed services. We are thus encouraged to see Shaw significantly ramp up its exposure to the space," said analyst Rob Goff. "The transaction leaves Shaw well positioned to take advantage of both the growing North American business IP traffic size and North American multi-tenant data centre market size."
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Pulse Seismic Inc. reported second-quarter results that were only slightly better than expected, but showed substantial improvement over recent quarters.
Revenue of $7.321-million beat consensus expectations for $6.407-million, while the provider of seismic data to the Canadian energy sector matched Street expectations in reporting a net loss of 1 cent.
Cantor Fitzgerald analyst Peter Prattas upgraded his rating to "buy" from "hold" after reviewing the results, although the action was largely attributed to the company's recent share price decline. He also trimmed his price target to $3.40 (Canadian) from $3.75 because of softening natural gas prices.
He commented: "Our forecast for this year remains materially intact. We are optimistic that Pulse can have a relatively strong second half of the year (versus both the second half of last year and the first half of this year). While the company's sales are inherently lumpy, we see the prospect of an increase in seismic data library sales on an increase in M&A activity in the Western Canadian oil and gas market. ... We are trimming out outlook for 2015 as a result of a recent retrenchment of natural prices. However, we still expect growth over 2014 on a return to a more normalized level of M&A activity and as investments made in participation surveys over recent years eventually get churned into subsequent licensing to non-participants. As the cost to maintain Pulse's data library is extremely low, we continue to forecast robust free cash flow generation for the company which it can apply toward dividends, share buybacks and further improving its already strong balance sheet."
Shares are up 1.3 per cent in early afternoon trading.
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In other analyst actions:
Raymond James upgraded Yamana Gold to "outperform" from "market perform" and hiked its price target to $10.50 (U.S.) from $10.
RBC Dominion Securities downgraded Manitoba Telecom Services to "sector perform" from "outperform" and cut its price target to $31 (Canadian) from $32.
TD Securities downgraded TransCanada to "hold" from "buy" but raised its price target to $56 (Canadian) from $55.
Mackie Research upgraded Kinross Gold to "buy" from "hold" but trimmed its price target to $6 (Canadian) from $6.25.
CIBC World Markets upgraded Cott to "sector outperformer" from "sector performer" and raised its price target to $10 (U.S.) from $9.
At least 15 analysts hiked their price targets on LinkedIn after the company posted better-than-expected quarterly earnings late Thursday. Jefferies has one of the highest targets, going up by $20 to $300 (U.S.). Shares are up 10 per cent this morning on the New York Stock Exchange.
Credit Suisse upgraded Marathon Petroleum to "outperform" from "neutral" and raised its price target to $110 (U.S.) from $105.