NATHAN DENETTE
Inside the Market's roundup of some of today's key analyst actions. This file will be updated often during the trading day so check back for new details.
IGM Financial Inc.'s underwhelming fourth-quarter results mean a dividend hike isn't coming this year, according to Desjardins Securities.
The company took an unexpected distribution charge related to reimbursements provided to clients who were not transferred into lower priced funds, said analyst Gary Ho.
Mr. Ho decreased his estimates for profits and valuation following these results, and does not expect the money manager to boost its dividend until the first quarter of 2016.
"While IGM trades at below historical valuation multiples, we believe this is warranted given recent announcements (IG distribution charge this quarter, Mackenzie fee cut in third quarter 2014, ongoing restructuring changes/charges)," he said. "In addition, we continue to monitor the net retail redemptions trend at Mackenzie and regulatory fee disclosure developments."
The analyst downgraded the stock to "hold" from "buy" and cut his price target to $48 (Canadian) from $54.
IGM was also downgraded to "sector perform" from "outperform" by RBC Capital analyst Geoffrey Kwan. His target price is $49.
The average analyst price target is $49.65.
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Imax Corp. has limited remaining upside potential after a recent runup in share price, Canaccord Genuity analyst Aravinda Galappatthige said.
The stock has risen by about 32 per cent over the last six months, likely as a result of high expectations for the 2015 film lineup, he said.
Imax now trades at a premium to both its historic trading range and its peer group valuation. "While we continue to believe the solid long-term growth in the business and the relative strengths of the upcoming slates, we prefer to await a better entry point," Mr. Galappatthige said.
He downgraded the stock to "hold" from "buy" and maintained a $34.50 (U.S) price target. The average analyst price target for Imax over the next year is $33.55.
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Mercer International Inc. is transitioning to a better balance sheet and a possible dividend, says CIBC World Markets analyst Mark Kennedy.
Mercer reported fourth-quarter EBITDA of $71.3-million, 11 per cent above Mr. Kennedy's estimate of $64.5-million.
He adds that the company has made significant gains in improving its balance sheet, and is also evolving to a less complicated financial structure.
"With capex expected to be in the $45-million per annum levels (both maintenance and discretionary), we forecast Mercer to generate free cash flow of $132.8-million in 2015 and $116.7 million in 2016," he says. "If this free cash flow generation can be sustained for 2-3 years it will have a significant impact in bringing Mercer's balance sheet close to investment grade quality by the end of 2017."
Mr. Kennedy maintains his "sector performer" rating and is boosting his target price to $15.50 (U.S.) from $13.
The analyst consensus price target is $12.95.
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Strong leasing results and a growing list of properties that should see the construction of higher-density homes have resulted in a boosted target price for RioCan Real Estate Investment Trust.
"RioCan identified 50 properties as having intensification potential, targeting development of up to 19,000 residential units over the next 10 years," says CIBC World Markets analyst Alex Avery.
Mr. Avery maintains a "sector outperformer" rating on the stock and is raising his target price to $33 (Canadian) from $30. The analyst consensus price target for RioCan Real Estate Investment Trust over the next year is $30.32.
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Desjardins Securities analyst Michael Parkin likes the prospects for Mandalay Resources Corp.'s future drilling plans.
Mr. Parkin notes that Mandalay's total gold reserves increased 136 per cent year-over-year while total gold resources increased 143 per cent.
"We remain encouraged by the future drilling plans by the company and expect in-fill drilling success to potentially extend mine lives," he says.
He maintains his "top pick" rating and $1.50 (Canadian) target price. The analyst consensus price target is $1.13.
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In other analyst actions
GoPro Inc. was rated "outperform" by Northland Securities. The 12-month target price is $70.00 per share.
Aspen Aerogels Inc. was raised to "outperform" from "neutral" by Robert Baird. The 12-month target price is $11.00 per share.
Sotheby's was downgraded to "market perform" from "outperform" by Cowen analyst Oliver Chen. The 12-month target price is $45.00 per share.
Box Inc. was rated new "outperform" by Credit Suisse analyst Philip Winslow. The target price is $24.00 per share.
Campus Crest Communities Inc. was raised to "buy" from "hold" by Wunderlich analyst Craig Kucera. The 12-month target price is $8.25 per share.
DHT Holdings Inc. was raised to "buy" from "hold" by DNB Markets analyst Nicolay Dyvik. The 12-month target price is $10.30 per share.
Euronav NV was rated new "buy" by Evercore ISI analyst Jonathan Chappell. The 12-month target price is $19.00 per share.
Micron Technology Inc. was raised to "outperform" from "neutral" by Macquarie analyst Deepon Nag. The 12-month target price is $40.00 per share.
Pandora Media Inc. was rated new "neutral" by Macquarie analyst Amy Yong. The 12-month target price is $16.00 per share.