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Monday’s analyst upgrades and downgrades

Fernando Morales/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.

BlackBerry Limited needs to cut its operating expenditure by 20 per cent below its target of $2-billion a year in order to be profitable, said Raymond James analyst Steven Li.

The company's partnership with Foxconn should help "accelerate break-even on hardware," Mr. Li wrote in a research note, but breaking even overall "remains a moving target" as revenue from its lucrative services division continues to decline, he said. BlackBerry reports earnings on Thursday.

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Mr. Li rates the stock "market perform" and has a $9.50 (U.S.) target price. The analyst consensus price target over the next year is $7.87, according to Thomson Reuters.

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Ritchie Bros. Auctioneers posted another strong result, this time from its industrial equipment auction held in Edmonton last week, said Cantor Fitzgerald analyst Peter Prattas.

"Momentum in auction proceeds seems to be building further, thus reinforcing our confidence that Ritchie Bros. can achieve the higher end of its 2014 guidance and continue accelerating into 2015," he wrote in a research note.

"Emerging tailwinds consist of a recovering construction sector, beneficial aging of equipment, dissipating impact of Tier 4 (emission standards) and improving workforce productivity."

Mr. Prattas rates the stock "buy" and has a $26 price target. The analyst consensus price target over the next year is $23.69, according to Thomson Reuters.

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Rising free cash flow forecasts could help Bankers Petroleum Ltd. boost future production growth, said FirstEnergy Capital analyst Darren Engels.

Following suit on a number of recent analyst upgrades on Bankers Petroleum, FirstEnergy increased its price target on the company to $10 (Canadian) from $7.40, while maintaining a "top pick" ranking on the stock.

With production expected to continue to grow at 10 per cent to 15 per cent annually, FirstEnergy estimates that Bankers Petroleum could generate in excess of $450-million (U.S.) in free cash flow over the next five years.

"This abundant free cash flow can be reinvested in the asset to accelerate production growth, as well as pay a very meaningful dividend in future years, potentially as early as 2016."

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CIBC World Markets analyst Jacob Bout believes Canexus Corp. should consider the sale of its chemical and midstream assets in order to maximize shareholder value.

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Mr. Bout expects Canexus' midstream assets to sell for $400-million to $620-million, though the window of opportunity is short as potential acquirers are likely to build their own facilities should the sale process be drawn out.

He values Canexus' chemical business between $810-million and $1.3-billion. Potential buyers include Superior Plus, Chemtrade Logistics Inc. Fund and other sodium chlorate players and private equity companies.

Mr. Bout maintains his "sector performer" rating and $6 target price. The analyst consensus price target over the next year is $4.90, according to Thomson Reuters.

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RBC Capital Markets analyst Michael Harvey expects Crescent Point Energy Corp. stock to outperform its peers, reflecting its exposure to large resource plays and low risk development opportunities.

"Crescent Point has an attractive inventory of drilling locations in multiple areas including the Bakken, Shaunavon, Viking, Beaverhill lake, Torquay and Uinta Basin plays that produce attractive rates of return at current oil prices," says Mr. Harvey.

He says that highly variable Canadian crude pricing has been offset by Crescent Point's capacity to deliver ~32,000 bbl/d of oil by rail, a number that could reach 70,000 boe/d in the coming years.

Mr. Harvey maintains his "outperform" rating and is raising his target price by a dollar to $53 (Canadian). The analyst consensus price target over the next year is $50.64, according to Thomson Reuters.

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Deputy head of Audience

Sonali Verma is deputy head of audience at the Globe and Mail. She is a business journalist with more than 20 years of experience, mainly in digital media.She was previously the Globe and Mail’s senior editor in charge of audience engagement, overseeing its homepages as well as social media operations. More

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