Inside the Market's roundup of some of today's key analyst actions
Shares in MacDonald Dettwiler and Associates Ltd. are up 10 per cent this afternoon, the top gainer on the TSX, after the company announced late Friday it has received antitrust approval for its acquisition of Space Systems/Loral Inc.
All regulatory approvals are believed to now be in place for the $875-million (U.S.) acquisition of the world’s largest maker of communication satellites, and closing is expected in coming weeks.
CIBC World Markets analyst Stephanie Price, who had earlier thought there was only a 40 per cent chance the deal would close, thinks even after today’s rally that shares can go a lot higher. She upgraded the Canadian space technology company to “sector outperformer.”
“The acquisition allows MDA to gain critical mass in the commercial satellite manufacturing industry and better positions the company to win U.S. defence and intelligence work,” Ms. Price commented in a note.
The deal will more than double the size of MDA, with combined 2011 revenues of about $1.9-billion. Analysts had estimated MDA’s 2013 earnings could increase by as much as 50 per cent over previous estimates if the acquisition proved successful.
Upside: Ms. Price raised her price target to $66 from $54.50. Shares were trading late Monday afternoon at $55.60, so her price target suggests shares could rally a further 20 per cent over the next 12 months.
Alamos Gold Inc. has reported an improvement in grades for the Escondida zone at its Mulatos project in Mexico, helping to lower costs and boost production. Recoveries, however, are still well below expectations and won’t reach the targeted 90 per cent level until at least next year, commented CIBC World Markets analyst Barry Cooper.
Upside: Mr. Cooper raised his price target by $2 to $23 and reiterated a “sector performer.”
Raymond James analyst Andrew Bradford has upgraded oilfield and trucking services company Mullen Group Ltd. to “market perform” from “underperform” due to the stock’s drop last week after unexpectedly poor third-quarter earnings. Still, he doesn’t expect a rally in Mullen shares any time soon given the challenging macroeconomic conditions and sluggishness in the oilpatch.
Upside: Mr. Bradford cut his price target to $22 from $23.75.
Eldorado Gold Corp.’s quarterly earnings only met expectations, but that was good enough for Raymond James analyst Brad Humphrey, especially given the company has ambitious plans to raise production by 160 per cent by 2016. “Reporting a quarter essentially in-line with the market’s expectations is paramount in this investing climate where investors are in no mood for volatile swings in a company’s performance,” he said.
Upside: Mr. Humphrey increased his price target by 50 cents to $20 (U.S.)
Canaccord Genuity analyst Aravinda Galappatthige initiated coverage on DHX Media Ltd., a producer, distributor and licensor of kids TV programming, with a “buy” rating. “We see it as an opportunity to capitalize on the growing value of content, spurred on by the emergence and proliferation of new digital platforms,” he said.
Upside: Mr. Galappatthige set a price target of $2.15.
For more analyst actions, breaking investing news and analysis, follow Darcy Keith on Twitter at @eyeonequities