Inside the Market’s roundup of some of today’s key analyst actions. This post will be updated with more analyst commentary during the trading day.
Stifel Nicolaus analyst Brad Reback downgraded Microsoft Inc. to “hold” from “buy,” commenting that the challenges facing the Windows business are “too much to ignore.” He’s also worried about pricing pressures in the computer industry.
“Although we think Microsoft’s software-business and enterprise-story is robust and worth ~$33-$34/share, we believe the Windows headwinds are more substantial than we envisioned a few months ago, especially as it relates to potential ASP [average selling price] contraction,” Marketwatch quoted him as saying in a research note.
Mr. Reback cut his fiscal year 2014 earnings per share estimate to $2.57 from $2.71, and his 2015 estimate to $2.89 from $3.04. He also scaled back his revenue projections on the company, now expecting $81.99-billion in 2014, down from $82.93-billion. For 2015, he expects revenue of $87.15-billion, down from $88.22-billion.
Target: Mr. Reback removed his $36 (U.S.) price target on the stock. The average analyst target is $35.18, according to Bloomberg data.
Raymond James analyst Steve Hansen upgraded Alliance Grain Traders Inc. to “outperform” from “market perform” after the agriculture company easily beat Street estimates in reporting second-quarter results.
The company’s EBITDA rose 50 per cent year over year, as the company’s focus on pulse processing begins to pay off by providing higher-margin growth.
“AGT is poised to embark on its next chapter of (high-margin) growth via pulse ingredients, a transition that will not only accrue healthy benefits to the company’s top line, but also to its core pulse processing platform, consolidated margin, and broader risk-profile,” Mr. Hansen said in a note.
Target: Mr. Hansen raised his price target to $19.50 (Canadian) from $18. The average target is $17.11.
As AcelRx Pharmaceuticals Inc. is getting ready to submit its new pain killer Zalviso to the U.S. Food and Drug Administration for final approval, Canaccord Genuity analyst Randall Stanicky is forecasting a bump in the drug company's stock price.
If all goes well, Zalviso will hit the U.S. market in early 2015 with projected sales in the range of $577-million, said Mr. Stanicky.
Target: Mr. Stanicky is reiterating his “Buy” rating for the stock and increasing his price target to $13 (U.S.) from $11. The average price target among analysts is $14.50 according to Bloomberg data.
With the “buzz” around soon-to-be-released movies like Divergent and Catching Fire getting louder, RBC Dominion Securities analyst David Bank sees good things to come for Lions Gate Entertainment Corp.
The production company has turned a profit on 22 of its last 24 films and has a host of new and existing franchises, as well as significant television and digital deals on the horizon, noted Mr. Bank.
Target: Mr. Bank raised his price target to $37 (U.S.) from $31. The average target is $37.91
Credit Suisse analyst Gregory Lewis is even more bullish on offshore drilling contractor Rowan Companies Inc. than he was before.
While the company has taken flack in the past for overbuilding its rigs, redundancy in ultra-deep water drill ships is the way of the future, said Mr. Lewis.
“The bottom line is that we believe RDC is the best earnings growth story among the offshore drillers through 2015,” he said.
Target: Mr. Lewis is maintaining his “outperform” rating and $45 (U.S.) price target. The average target is $40.52
For more analyst actions, breaking investing news and analysis, follow Darcy Keith on Twitter at @ eyeonequities