If traffic at the BlackBerry booth at the International Consumer Electronics Show is any indication of market sentiment, 2012 will not be any kinder to Research In Motion Ltd. than 2011 was, according to National Bank Financial analyst Kris Thompson.
RIM is demonstrating some of the new features packaged into an upcoming software update for its PlayBook tablet at the Las Vegas show, which draws a massive tech audience from around the world. The Waterloo-based company has been criticized for lacking some of the functions that critics and consumers had expected for the tablet, which only found meaningful sales success after being offered at steeply discounted prices. The software update won't be available until February.
"RIM's BlackBerry booth didn't seem to have many visitors given the lack of new product launches at CES," Mr. Thompson says in a research note, which described traffic levels as "very, very low."
"At least we had a chance to evaluate native mail, calendar and contacts functionality on the PlayBook 2.0 software... We heard that PlayBook pricing promotions over the holidays cleared out plenty of stock but that RIM still has many PlayBooks in inventory as retailers await the 2.0 software update before reloading product orders."
In the meantime, he notes that the competitive landscape for smartphones is growing stronger.
Global smartphone leader (by third-quarter unit sales) Samsung looks to be unstoppable in the near term with its product line-up, Mr. Thompson maintains. The company is launching a "long-term evolution" product in 2012 featuring big screens, fast chips and dual-cameras. Similar offerings are on tap at Nokia, Motorola and HTC.
Relative newcomer Huawei could make a splash with its Ascend P1 S smartphone, he adds. "This smartphone looks similar to the Samsung Galaxy with all the bells and whistles. Keep an eye out for this phone in second-quarter 2012."
Downside: Mr. Thompson maintained an "underperform" rating on RIM and an $8 (U.S.) price target.
A strong heavy oil-focused management team and a competitive cost structure makes Baytex Energy Corp. an attractive stock, according to Desjardins Capital Markets analyst Allen Stepa.
Mr. Stepa believes that at current trading levels, Baytex's shares still offer investors an attractive entry point given the company's high-quality heavy oil asset base, strong balance sheet and attractive dividend yield. "In our view, Baytex's active hedging program should stabilize the company's cash flow and minimize the risk to its capital spending program and dividend should commodity prices sell off," he says.
Upside: He reiterated his "buy" rating and raised his target price to $66 from $62 (Canadian).
Continued share price weakness at Fortress Paper Ltd. and stabilizing dissolving pulp prices have Raymond James Ltd. analyst Dary Swetlishoff bullish on the stock's future.
Mr. Swetlishoff notes that shares are down 40 per cent from October, due largely to falling pulp prices and production delays at the Thurso mill. But with prices no longer in sharp descent, and ramped up production at the Quebec mill, 2012 promises strong growth potential.
Upside: He upgraded Fortress Paper to "strong buy" - the research firm's highest recommendation - from "outperform," and reiterated his target price of $48 (Canadian).
Several analysts trimmed their share price targets on Talisman Energy Inc. after the oil and gas producer released its 2012 capital expenditure budget and preliminary 2011 results. The company forecast a production growth rate this year of zero to 5 per cent, at the low end of original near-term growth plans of between 5 per cent and 10 per cent.
"The key takeway .... in our view is that the transformation process for the company continues to be protracted," commented Canaccord Genuity analyst Phil Skolnick.
Downside: CIBC World Markets cut its price target by 50 cents to $22.50 (U.S.), while FirstEnergy Capital and Canaccord Genuity cut their targets by $1 a share, to $16 and $15, respectively.
Despite a disappointing year in which Pacific Rubiales Energy Corp. failed to meet many of its production forecasts, CIBC World Markets Inc. analyst Ian Macqueen remains optimistic the company can turn the situation around in 2012. He is still forecasting 15 per cent production growth and is maintaining a "sector outperformer" rating on the stock.
Downside: Mr. Macqueen cut his price target to $30.75 from $33.