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Analysts cut price targets on Newmont, Thomson Reuters

With continued labour inflation, falling grades at aging mines, and unfavourable currency swings in countries in which it operates, Newmont Mining Corp. should see costs continue to rise into next year, commented RBC Dominion Securities Inc. analyst Stephen D. Walker. But while he sees little near-term production growth, he notes the company has excellent leverage to rising gold prices and has a demonstrated commitment to returning capital to shareholders through attractive dividend payouts.

Downside: Mr. Walker cut his price target by $5 to $82 and reiterated his "sector perform-average risk" rating.

Related: Gold miners bump up their dividends

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Thomson Reuters Corp. reported "decent" third-quarter results, commented CIBC World Markets Inc. analyst Robert Bek. But he notes that growth in its key markets division will likely have to wait until 2013 as restructuring efforts announced in July play out. "As such, we believe the Street will discount numbers further while waiting on execution," he said.

Downside: Mr. Bek cut his price target by $5 to $35 (U.S.) and maintained a "sector performer" rating.

Related: Thomson Reuters takes aim at problems in markets division

National Bank Financial analyst Heather C. Kirk has downgraded Scott's Real Estate Investment Trust to "underperform," citing the REIT's recent rally and several risks that include a debt load that's higher than peers and an unsustainable payout ratio. She expects the number of disclaimed leases will grow, putting pressure on revenues.

Downside: Ms. Kirk cut her price target by 50 cents to $6.50.

Investors should buy shares of Bear Creek Mining Corp. ahead of the soon-to-be-released feasibility study of its Corani project in Peru, argues Raymond James Ltd. analyst Brad Humphrey. Corani is one of the world's largest undeveloped silver projects not already in the hands of a major producer and has been overshadowed by less material issues surrounding Peruvian politics and the government's cancelation of Bear Creek's smaller Santa Ana project, he said. He also sees Corani becoming a takeover target.

Upside: Mr. Humphrey upgraded Bear Creek to "outperform" from "market perform" but trimmed his price target by 55 cents to $7.25.

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The latest drill results from Imperial Metals Corp.'s Red Chris project in British Columbia "point to the development of a truly world-class copper deposit," said CIBC World Markets Inc. analyst Ian Parkinson. He estimates that resources will grow to 1.6 billion tonnes from 927 million when the company releases its next estimate. "While the property has multiple development options, future exploration may define this as one of the world's "big ones," he said.

Upside: Mr. Parkinson reiterated a "sector outperformer" rating and $35 price target, commenting that "we expect continued strength in the stock as further developments regarding Red Chris are released by the company."

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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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