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Rail congestion around Chicago and rising costs are expected to trump a boost in shipping volumes when Canadian Pacific Railway Co. reports financial results for the second quarter on Thursday.


Inside the Market's roundup of some of today's key analyst actions. This file will be updated during the trading day.

At least four analysts raised their price targets on Canadian Pacific Railway Ltd. in the wake of the company's strong second-quarter results. This brings the average 12-month price target on the Street to $213.28 (Canadian), compared to about $200 prior to this week's earnings release, according to Bloomberg data.

CP Rail's earnings per share rose 48 per cent from a year earlier to $2.11, beating the Street consensus of $2.09. It continues to make progress at bringing down its operating ratio, with continued strong revenue growth expected in the second half of this year.

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"CP's outlook remains very good. We expect strong sales growth and significant margin expansion will produce very strong earnings growth. We also expect strong growth to support a premium valuation multiple," said Canaccord Genuity analyst David Tyerman in raising his price target to $188 (Canadian) from $182.

But he maintained a "hold" rating, on the belief that CP's strong outlook is already reflected in the current share price.

Other price target changes included Barclays hiking its target to $220 (Canadian) from $210. No analyst rating changes were spotted.


Raymond James analyst Steve Hansen raised his price target on Canadian National Railway Ltd. by $10 to $78 (Canadian) and reiterated an "outperform" rating in the wake of the company reporting impressive growth in shipment volumes in its second quarter.

"Notwithstanding CN's strong year-to-date share price performance (CN +18.5 per cent vs. TSX +12.1 per cent), we continue to see attractive upside throughout our horizon as the company leverages its best-in-class operating platform to drive incremental volume and pricing gains," Mr. Hansen said in a note.

CN Rail's second-quarter carloads surged 11 per cent in the second quarter, "demonstrating a swift and definitive recovery on the back of one of the worst winters on record," he added.

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Canaccord Genuity analyst Jenny Ma upgraded Mainstreet Equity Corp. to "buy" from "hold" and raised his price target to $44 (Canadian) from $39.25 after the company reported fiscal third-quarter earnings this week. TD Securities also raised its price target to $43 from $40, while maintaining a "hold" rating.

Mainstreet improved its funds from operations to 64 cents per share in the quarter from 52 cents a year earlier. Results got a boost from higher same-property net operating income (NOI), interest expense savings from refinancing debt, and acquisitions.

"In our view, Mainstreet is well-positioned to achieve above-average growth in per share cash flow and NAV going forward, driven by the continued stabilization of properties within its portfolio and solid same-property NOI growth prospects from strength in rental apartment fundamentals in Mainstreet's Western Canadian markets, particularly Edmonton and Calgary," Canaccord analyst Jenny Ma said in a research note. "We expect that strong rental apartment market fundamentals should continue to support gains in occupancy and increases in rental rates in Mainstreet's markets, which should propel growth in cash flow."


In other analyst actions:

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Dundee Securities downgraded Timbercreek MIC to "neutral" from "buy" and cut its price target to $9.25 (Canadian) from $10.

Canaccord upgraded IBI Group to "speculative buy" from "hold" and hiked price target to $2.75 (Canadian) from $1.50.

Canaccord Genuity downgraded UrtheCast to "hold" from "speculative buy" and cut its target to $1.50 (Canadian) from $3.50.

Raymond James upgraded Winpak to "outperform" from "market perform" and hiked its price target price to $30 (Canadian) from $27.50.

Desjardins raised its price target on EnerCare to $15.50 (Canadian) from $11.50 and maintained a "hold" rating.

Raymond James initiated coverage on Dundee Precious Metals with an "outperform" rating and $7.50 (Canadian) price target.

Cantor Fitzgerald Canada initiated coverage on BSM Technologies with a "buy" rating and $3 (Canadian) price target.

Merrill Lynch downgraded AMD to "underperform" from "neutral" and cut its price target to $4 (Canadian) from $4.50.

Janney Montgomery Scott upgraded Time Warner to "buy" from "neutral" with a price target of $100 (U.S.).

At least eight analysts cut their price targets on EBay in the wake of the company's latest quarterly results.

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About the Author
Investment Editor

Darcy Keith is The Globe and Mail's Investment Editor. He has been a business journalist since 1992 and joined the Report on Business in 2010 from Yahoo! Canada, where he was the senior editor of finance. More


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