BCE CEO George Cope is shown at the company’s annual general meeting in Toronto in 2013.Chris Young/The Canadian Press
Inside the Market's roundup of some of today's key analyst actions. This file will be updated often during the trading day so check back for new details.
TD Securities Inc. analyst Vince Valentini thinks many of the negative headlines affecting BCE Inc. are already factored into the stock price. The analyst raised his rating to "hold" from "reduce."
With the CRTC decision on TV rules and the confirmation that new players in the wireless field will be able to buy large amounts of the wireless services network at heavily subsidized prices, BCE has experienced a recent selloff. The analyst says there are still some possible negative decisions to come, but that the potential downside does not justify a "reduce" rating.
The negatives may not be completely in the past though, as the CRTC is expected to make an announcement on wireless roaming rates soon and the possibility exists for new funding or partners to help bolster upstart competitor WIND Mobile Corp.'s position.
The analyst pointed to a possible silver lining for BCE if WIND's position does improve though. He thinks Industry Canada may put up less resistance to BCE's takeover of Manitoba Telecom Services Inc. if a fourth carrier has begun to become established in Canada's four largest provinces.
Mr. Valentini held his target price at $55. Consensus is $55.80, according to Thomson Reuters.
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Magellan Aerospace Corp. is facing less risk and operating a solid balance sheet, TD Securities Inc. analyst Tim James said. The analyst upgraded the stock to "buy" from "hold."
Magellan reported fourth-quarter 2014 earnings per share of 31 cents, just below Mr. James's 32-cent estimate. EBITDA of $34.7-million was also virtually in-line with the $35.9-million forecast.
Multi-year backlogs at Boeing and Airbus, both of which Magellan manufacturers for, will contribute to the company's stability. Magellan has also shown improvement in its margins and its debt is declining.
Mr. James raised his target price to $16.50 from $15.50. Consensus is $15.75, according to Thomson Reuters.
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Amazon.com Inc. has said it will provide some insight into the operating margins on its core North American retail business for the first time. As questions about the company's profitability persist, investors are eagerly awaiting the news, which is expected prior to its 2015 first-quarter earnings report.
Citigroup Global Markets Inc. analyst Mark May does not think Amazon.com Inc.'s North American retail margins are as low as some fear. The analyst is maintaining his "buy" rating on the stock and moving his target price forward ahead of the news.
Mr. May thinks Amazon's retail margins for its North American segment have remained around the 4.5 per cent level in recent years. Though investments in Amazon Web Services, video content and other investments have reduced margins, the analyst thinks that many of these costs are "one-time in nature and related to the decision to build out sortation centres for greater last-mile delivery."
Amazon's margins on its international retail business were dragged into the negative last year, as investment in isolated, under-penetrated countries weighed on profits. Mr. May expects these margins to improve over the long term, however.
The analyst raised his target price to $430 (U.S.) from $405. Consensus is $395.43, according to Thomson Reuters.
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With the acquisition environment more active than Credit Suisse analyst David Hartley previously thought, the analyst is upgrading Alimentation Couche-Tard Inc. to "neutral" from "underperform."
Couche-Tard's recent Shell Denmark and the Pantry Inc. deals have pushed the company's stock price higher, perhaps precariously so, according to Mr. Hartley, but the analyst also predicts cost savings through synergies and earnings per share growth.
The analyst is still wary about the company's decentralized business model though, and does not think the company's valuation, stretched street forecasts and potential gasoline margin weakness warrant more than a "neutral" rating.
Mr. Hartley raised his target price to $47 from $36. Consensus is $43.26, according to Thomson Reuters.
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Cogeco Cable Inc. is down 5 per cent since mid-January. TD Securities Inc. analyst Vince Valentini raised his rating on the stock to "hold" from "reduce," on the lower price and improved valuation multiple.
Though the analyst thinks the share price is no longer investor-inhibitive, he expects Cogeco to face increased competition from Bell Fibe in the next year. Paired with U.S. content inflation, which will likely pressure margins or damage subscriber increases, Mr. Valentini's concerns about Cogeco's fundamentals prevent him from recommending the stock.
Mr. Valentini maintained his $72 target price. Consensus is $76.44, according to Thomson Reuters.
In other analyst actions:
Legacy Oil + Gas Inc. was downgraded to "market perform" from "outperform" at FirstEnergy. The company also was downgraded to "neutral" from "outperform" at Macquarie. The 12-month target price is $2 (Canadian) per share.
Alexco Resource Corp. was raised to "market perform" from "reduce" at Cormark Securities. The 12-month target price is 45 cents (Canadian) per share.
Cisco Systems Inc. was rated new "neutral" at Guggenheim Securities.
Dalradian Resources Inc. was rated new "outperform" at RBC Capital. The 12-month target price is $1.45 (Canadian) per share.
Epicore BioNetworks Inc. was rated new "buy" at Cantor Fitzgerald. The 12-month target price is $1.65 (Canadian) per share.
Grenville Strategic Royalty Corp. was rated new "outperform" at Raymond James. The 12-month target price is $1.20 (Canadian) per share.
Striker Exploration Corp. was rated new "speculative buy" at Beacon Secs. The 12-month target price is $3.50 (Canadian) per share.
SanDisk Corp. was downgraded to "neutral" from "buy" at Ladenburg Thalmann. The 12-month target price is $72 (U.S.) per share.