Inside the Market's roundup of some of today's key analyst actions
Oppenheimer has cut its stock price outlook on Apple Inc. over concerns that consumers will wait for new models before buying more of the company’s devices.
Oppenheimer said it doesn’t see Apple shares rallying much “until we get closer to the product cycle or get more clarity on Apple’s cash intentions,” according to Dow Jones Newswires.
“Like spring training, the national pastime of predicting potential iPhone/iPad release dates is picking up steam and increasingly mid-year focused,” the firm said.
But it thinks this view is already factored into the stock price to some degree and maintained an “outperform” rating.
Target: Oppenheimer reduced its target by $50 to $550 (U.S.). The average target among analysts is $600.48, according to Bloomberg data.
Smart Technologies Inc., which develops interactive technology products, is experiencing challenging end market conditions in its education markets that may persist for some time, said RBC Dominion Securities analyst Paul Treiber.
The company this week cancelled plans to re-finance its outstanding $289-million term loan, indicating it would no longer be an opportune time to do so. Earlier this month, it reduced its fiscal fourth quarter revenue outlook.
“SMART retains a strong market position and is targeting new opportunities; however, with low visibility to a recovery in end market demand, we see valuation remaining range-bound,” said RBC analyst Paul Treiber.
Upside: Mr. Treiber cut his price target by 50 cents to $1.50 (U.S.) and reiterated a “sector perform” rating. The average price target is $2.19.
Niko Resources Ltd. is “a high-risk investment that may have over-corrected,” said Raymond James analyst Rafi Khouri.
The stock has fallen 49 per cent, and most of the decline has occurred since mid-February, following management’s downward revision of production forecasts and mainly negative updates on exploration results, he said.
“At $5.41, we calculate that Niko shares are pricing in roughly a 50 per cent probability of a gas price increase to $8 (U.S.)/mmBTU on the D6 Block. We believe that the actual odds of such a price increase are materially higher and, furthermore, that momentum is building for a potential resolution in the coming months. Thus, we recommend that investors with a high tolerance for risk add shares at current levels,” Mr. Khouri said.
Target: Mr. Khouri rates the stock “outperform” and has a $12 price target. The average price target is $11.87.
Nevsun Resources Ltd. offers one of the highest dividend yields in the industry and is actively scouting for acquisitions, said CIBC World Markets analyst Cosmos Chiu.
“In a mining industry where cash is increasingly scarce, Nevsun certainly stands out with a well-funded balance sheet (about $396-million in cash at year-end 2012). Despite the transition from gold to copper in 2013, we believe Nevsun will continue to accumulate cash, which could top about $500-million by year-end 2013,” he wrote in a research note.
Target: Mr. Chiu has a $4.50 target price on the stock and rates it “sector underperformer.” The average analyst target is $5.36.
Equal Energy Ltd.’s recent sharp rally “provides investors with an opportunity to take some money off the table and crystallize the stock’s recent outperformance,” said Desjardins Securities analyst Tim Murray.
“We would expect the stock to continue trading near current levels until the company provides a material update on the special committee’s evaluation” of a takeover offer by Montclair Energy, he said. “In light of our view that a significantly superior proposal is unlikely to surface, we would expect a more attractive entry point for the story to emerge eventually.”
Equal trades at a large discount compared with its small‐cap peer group, and at a discount to its small-cap yield-paying peer group as well, he noted. “We attribute the discount valuation to the company’s lower cash flow netbacks as a result of its high natural gas production weighting and currently depressed Conway propane prices.”
Target : Mr. Murray has a 12-month price target of $4.25 and downgraded his rating to “hold” from “buy.” The average Street target is $4.77.
For more analyst actions, breaking investing news and analysis, follow Darcy Keith on Twitter at @ eyeonequities
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