An exterior view of a Rona store in Brossard, Que., on Jan. 30, 2013.Christinne Muschi/The Globe and Mail
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.
Rona Inc.'s strong same-store sales growth in the fourth quarter prompted Canaccord Genuity to change its tune on the company.
The distributor and retailer of home improvement, hardware, and gardening products posted earnings per share ahead of analysts' estimates, buoyed by same-store retail sales growth of 6 per cent.
"We note that following 4 years of same-store sales declines, RONA reported its second consecutive quarter of positive same-store sales growth," said analyst Derek Dley. "However, we remain concerned that the macro environment continues to offer headwinds to the home renovation spending market."
Mr. Dley pointed out that slower growth in Western Canada due to the drop-off in oil prices will adversely affect the company, which generates 30 per cent of its revenues from the region.
The analyst upgraded the stock to "hold" from "sell" and hiked his price target to $13 (Canadian) from $12.
Separately, Desjardins Securities analyst Keith Howlett maintained a "buy" rating on the stock and increased his price target to $16 from $15. The analyst consensus price target is $13.94.
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Better margins on U.S. fuel sales have resulted in a target price hike for Alimentation Couche-Tard Inc.
BMO Nesbitt Burns analyst Peter Sklar estimates that the company experienced an aggregate U.S. motor fuel margin of 28.2 cents (U.S.) per gallon in the third quarter, which is significantly above his prior estimate of 18.5 cents per gallon. "As a result, we are revising our U.S. motor fuel margin estimate upward," he says.
Mr. Sklar maintains his "outperform" rating and is raising his target price to $54 (Canadian) from $52. The analyst consensus price target is $42.65.
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The acquisition of Brit will boost the earnings and global reach of Fairfax Financial Holdings Ltd., says BMO Nesbitt Burns analyst Tom Mackinnon.
Fairfax has reached an agreement to acquire all of the outstanding shares of special insurer Brit for $1.88-billion (U.S.). Mr. Mackinnon notes that while the funding of the deal is still uncertain, he estimates it is 8 per cent accretive to Fairfax's earnings per share.
"Strategically, the acquisition improves FFH's presence in Lloyd's syndicates, expands FFH's worldwide specialty operations and leverages FFH's expertise in the U.S. and international markets," he says.
Mr. Mackinnon maintains his "market perform" rating and is increasing his target price to $720 from $675. The analyst consensus price target for Fairfax Financial over the next year is $481.33.
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Capstone Mining Corp. faces several key decisions in 2015, says Desjardins Securities analyst Jackie Przybylowski.
Capstone's fourth-quarter 2014 results were in line with Ms. Przybylowski's forecasts, and the company has maintained its previously released 2015 production guidance. Now it faces three decisions for the coming year: The scale of the Pinto Valley expansion plan, a potential temporary closure at Minto due to market conditions and slower-than-expected permits, and whether to proceed, slow or sell it Santo Domingo project.
She maintains her "buy" rating and is cutting her price target to $2.50 (Canadian) from $3.00.
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Dundee Securities analyst Josh Wolfson is initiating coverage on Klondex Mines Ltd. with a bullish take on the high-grade gold producer.
"We believe Klondex offers investors a portfolio of low cost assets which can generate robust cash and present meaningful exploration upside," says Mr. Wolfson.
He is initiating coverage on Klondex Mines with a "buy" rating and $3.15 (Canadian) target price. The analyst consensus price target is $3.34.
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In other analyst actions
Agnico Eagle Mines Ltd. was raised to "overweight" from "neutral" at JPMorgan by equity analyst John Bridges. The 12-month target price is $41.00 (U.S.) per share.
Basic Energy Services Inc. was rated new "market perform" at BMO Capital Markets by equity analyst Daniel Boyd. The 12-month target price is $8.50 per share.
Baker Hughes Inc. was rated new "outperform" at BMO Capital Markets by equity analyst Daniel Boyd. The 12-month target price is $78.00 per share.
Calfrac Well Services Ltd. was downgraded to "hold" from "buy" at Paradigm Capital by equity analyst Jason Tucker. The target price is $11.00 (Canadian) per share.
Elkwater Resources Ltd. was rated new "speculative buy" at TD Securities by equity analyst Juan Jarrah. The 12-month target price is $0.20 per share.
H&R Real Estate Investment Trust was downgraded to "buy" from "action list buy" at TD Securities by equity analyst Sam Damiani. The 12-month target price is $28.00 per share.
Klondex Mines Ltd. was rated new "buy" at Dundee by equity analyst Josh Wolfson. The 12-month target price is $3.15 per share.
Luna Gold Corp. was downgraded to "reduce" from "market perform" at Cormark Securities by equity analyst Richard Gray. The 12-month target price is $0.20 per share.
Legg Mason Inc. was raised to "buy" from "hold" at Jefferies by equity analyst Daniel Fannon. The 12-month target price is $67.00 (U.S.) per share.
National Bank of Canada was raised to "buy" from "market perform" at Cormark Securities by equity analyst Meny Grauman. The target price is $49.00 (Canadian) per share.
PHX Energy Services Corp. was downgraded to "hold" from "buy" at Paradigm Capital by equity analyst Jason Tucker. The target price is $9.00 per share.
Pacific Rubiales Energy Corp. was raised to "sector perform" from "underperform" at RBC Capital by equity analyst Nathan Piper. The 12-month target price is $5.00 per share.
Royal Bank of Canada was downgraded to "buy" from "top pick" at Cormark Securities by equity analyst Meny Grauman. The target price is $80.00 per share.
Trican Well Service Ltd. was downgraded to "hold" from "buy" at Paradigm Capital by equity analyst Jason Tucker. The target price is $5.50 per share.
Timmins Gold Corp. was downgraded to "neutral" from "buy" at PI Financial by equity analyst Philip Ker. The 12-month target price is $1.20 per share.
Total Energy Services Inc. was raised to "buy" from "hold" at Paradigm Capital by equity analyst Jason Tucker. The target price is $17.50 per share.
Avnel Gold Mining Ltd. was rated new "buy" by Tyron Breytenbach of Cormark Securities with a target price of $0.70 (Canadian) per share.
With files from Bloomberg News