A technician opens a pressure gas valve inside the Oil and Natural Gas Corp. gathering station on the outskirts of the western Indian city of Ahmedabad March 2, 2012.Amit Dave/Reuters
Inside the Market's roundup of some of today's key analyst actions. This file will be updated during the trading day.
TD Securities analyst Scott Treadwell believes Enerflex Ltd. has reshaped itself for the better with its $430-million (U.S.) acquisition of the international assets of privately held Axip Energy Services LP.
"We view this deal as an excellent use of Enerflex's strong balance sheet, acquiring a high-margin, recurring revenue stream that increases Enerflex's overall footprint to clients as well as expands its key strategic markets," Mr. Treadwell said as he upgraded his rating on the company's shares to "buy" from "hold."
"Enerflex's acquisition of Axip's international business immediately bolsters the company's international segment, now a full-cycle provider of gas processing and compression equipment and services," he commented.
Axip's key relationships with national oil companies and its market positions, especially in Mexico and Argentina, offer more clarity on the long-term prospects for Enerflex and turns it into a "globally relevant, full-cycle provider of gas processing and compression," he said.
Mr. Treadwell raised his price target on Enerflex to $22 (Canadian) from $19.
CIBC World Markets analyst Jon Morrison also took a positive view on the deal, raising his price target to $23 from $21 and reaffirming a "sector performer" rating. "Overall, we believe operating these assets is within Enerflex's core competencies and should provide a strong and predictable free cash flow stream moving forward," Mr. Morrison said.
Elsewhere, AltaCorp Capital Research raised its target on Enerflex to $27 from $23 and maintained an "outperform" rating.
The average price target among analysts is now $21.14, up from $19.71 a month ago.
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A dividend cut is looming for Cliffs Natural Resources Inc., warns Wells Fargo analyst Sam Dubinsky, who sees further downside in the stock as iron ore prices deteriorate further.
He cut his price target range to $7-$10 (U.S.) from $12-14 while reiterating an "underperform" rating.
Mr. Dubinsky believes a "deep restructuring" would be the only saving grace for the company. But even then he remains doubtful.
"While we believe Cliffs will be able to have certain debt covenants lifted, we see risk the company may need to cut its dividend," Mr. Dubinsky was quoted as saying by StreetInsider.com. "At today's spot iron ore pricing, we estimate Cliffs is burning about $80-million in cash including capital expenditures and about $220-million including dividend payments. We view the dividend as unsustainable unless pricing recovers to $100-$110/MT or assets are sold."
Shares in the company are down nearly 2 per cent at $15.31 (U.S.) at the opening of trade today. The analyst consensus price target over the next year is $18.00, according to Thomson Reuters.
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Heading into the 2014 World Cup in Brazil, the odds do not favour Nike Inc. stock, said Canaccord Genuity analyst Camilo Lyon.
Historically, the sports apparel company has fallen victim to overreaching expectations surrounding the soccer tournament.
"We believe the wide swings in NKE's stock in World Cup years are exacerbated by heightened sales expectations and/or forward year guidance that end up disappointing," Mr. Lyon said.
In previous instalments of the World Cup dating back to 1990, Nike stock has typically topped out in the spring, sold off through the tournament, and bottomed out in the fall before recovering.
Over the last six World Cups, the average peak-to-trough slide was 23.7 per cent, while the average ensuing rally posted a gain of 37.2 per cent, Mr. Lyon said.
If the same pattern holds, Nike could fall as far as the low $60s (U.S) heading into the company's fourth-quarter earnings announcement in late June.
"We conclude that tactically avoiding Nike in the months preceding the World Cup through June earnings followed by buying the stock roughly two to three months later provides the best return," Mr. Lyon said.
He maintained a "hold" rating and a $71 (U.S.) target price on the stock. The average price target among analysts is $82.39.
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Canaccord Genuity added McCoy Global Corp. to its Canadian Focus List -- the research firm's favourite investing ideas -- while reiterating a "buy" rating and $8.25 (Canadian) price target.
Analyst John Bereznicki was impressed with the company's first-quarter results, which showed a solid backlog of work, and he expects sales at the oilfield services company to gain momentum as the year progresses.
"We expect McCoy to enjoy a meaningful sequential earnings per share recovery in Q2/14 and benefit from its numerous organic growth initiatives through our forecast horizon," Mr. Bereznicki said in a research note.
The analyst consensus price target is $7.85.
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The recent acquisition by Gluskin Sheff + Associates Inc. will be of some help to earnings, but the true value of the deal is strategic, CIBC World Markets analyst Paul Holden said.
On Monday, the money manager announced that it will acquire Blair Franklin Asset Management for a total price of about $72-million (Canadian) in cash and stock.
Blair Franklin's main fund, which over the last decade has generated an average annual return of 14 per cent, focuses on credit spreads to minimize the risk of rising interest rates.
"The firm is adding a new product offering that will meet the need to deliver a balanced investment portfolio to clients with the potential to derive positive returns in a rising yield environment," Mr. Holden said.
He raised his price target on Gluskin Sheff shares to $35.50 (Canadian) from $34.50 while maintaining a "sector performer" rating.
Elsewhere, TD Securities upgraded Gluskin Sheff to "buy" from "hold" and raised its price target to $37 from $35.
The average price target is now $34.17, up from $31.79 a month ago.
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In other analyst actions:
RBC Dominion Securities raised its price target on Saputo to $61 (Canadian) from $56 and maintained an "outperform" rating.
Canaccord Genuity hiked its price target on Apple to $710 (U.S.) from $660 and reiterated a "buy" rating. Susquehanna raised its target to $725 from $650 and reiterated a "positive" rating. Credit Suisse raised its target to $600 from $560.
Credit Suisse downgraded Allergan to "neutral" from "outperform" and reaffirmed a price target of $190 (U.S.), seeing a balanced risk/reward after the revised takeover offer from Valeant Pharmaceuticals.
Wells Fargo upgraded Devon Energy to "outperform" from "market perform" and raised its price target to $85-90 from $70-75.
Wedbush upgraded Broadcom to "outperform" from "neutral" and raised its price target to $43 (U.S.) from $30.
Canaccord Genuity hiked its price target on Goodrich Petroleum to $33 (U.S.) from $29 and reiterated a "buy" rating.
Darcy Keith