Inside the Market's roundup of some of today's key analyst actions
Shares in base metals miner Teck Resources Ltd. got smacked today, falling by about 5 per cent, as the escalating concerns over Cyprus sent copper to its lowest level in seven months.
Nevertheless, Raymond James analyst Alex Terentiew sees reason to buy.
“We continue to like Teck at current levels, due to its strong coal division and still robust cost structure,” Mr. Terentiew said in a research report issued this morning prior to the selloff.
He also sees potential in the company’s oil sands projects and its three key development-stage copper projects. The net asset value of the stock is relatively low-risk, he notes, given that most of it is attributed to producing projects in safe jurisdictions. Teck also has a 3 per cent dividend yield, among the highest for base metal miners, he points out.
Meanwhile, Teck expects a price to be settled within days for second-quarter metallurgical coal contract deliveries, which Mr. Terentiew believes could be favourable for the miner.
Target: Mr. Terentiew reiterated an “outperform” rating and $39 (Canadian) price target. The average price target among analysts is $40.49, according to Bloomberg data.
Over the past several years, units in InnVest REIT have failed to match the performance of the broader real estate investment trust market. But RBC Dominion Securities analyst Neil Downey believes this is about to change.
The company recently announced a new strategic plan that calls for non-core property divestitures, a focused capital expenditure program, a strengthened balance sheet, and an improvement in operations.
“Looking forward, we see a reinvigorated executive team (new CEO and CFO) and a path towards a future InnVest that owns a higher quality, more concentrated portfolio of properties that are generating improved financial returns,” said Mr. Downey, who upgraded the stock to “outperform” from “sector perform.”
Target: Mr. Downey maintained a $5.50 price target. The average target on the Street is $5.13.
Raymond James analyst Gary Baschuk initiated coverage on Roxgold Inc., which is focused on developing the Yaramoko project in Burkina Faso, with an “outperform” rating.
He views the company’s initial resource base as strong, and believes the property has significant potential for additional discoveries.
Target: Mr. Baschuk set a price target of $1.40. The average target is $1.23.
UBS Securities has downgraded Deere & Co. to “neutral” from “buy,” believing lower corn prices that are projected for later this year will cut into farm equipment demand.
“The relative performance of farm equipment stocks, and Deere in particular, has historically traded closely with corn,” Streetinsider.com quoted UBS analysts as saying. “Accordingly, if the consensus (and our) forecasts for farm commodity prices come to fruition, we expect Deere to materially underperform the market.”
Target: The average price target among analysts is $101.76.
With the majority of its revenues coming from the growing commercial aerospace end market, and an improved sales mix following the acquisition of Goodrich Pump & Engine Control Systems, Triumph Group Inc. is attractively valued, said RBC Dominion Securities analyst Robert Stallard.
Triumph, a manufacturer of aircraft components, is trading at a discount to peers, but this could shrink as it continues to deliver consistent earnings growth, said Mr. Stallard.
Upside: Mr. Stallard raised his price target to $93 (U.S.) from $82 and reiterated an “outperform” rating. The average price target is $85.08.
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