Friday's analyst upgrades and downgrades

Share

Inside the Market's roundup of some of today's key analyst actions. This file will be updated during the trading day. For breaking analyst actions prior to market open every day, read our Before the Bell morning report.

Shares in Royal Bank of Canada are making up for some of their lost ground this week, up by nearly 2 per cent at mid-morning with the help of an analyst upgrade at TD Securities.

TD's Mario Mendonca - one of the most respected banking analysts on the Street - raised his rating to "buy" from "hold," in an action largely tied to valuation after the company reported its latest earnings on Thursday. Adjusted earnings per share of $1.42 beat the consensus forecast of $1.39, though the bank did not raise its dividend.

"Since we initiated coverage on the banks in October, Royal has moved from a 7 per cent premium to the group back to its long-term average of 3 per cent," StreetInsider.com quoted Mr. Mendonca as saying. "We continue to believe that the strong retail results as well as the shift to corporate lending, underwriting, and M&A from pure trading and considerable improvement in domestic growth support a premium multiple."

He also noted that the bank's fixed income trading business held in better than expected in its latest quarter, at a time when that segment saw considerable weakness at U.S. investment banks. "We like the diversification Royal's large capital markets business offers and the improved stability in the capital market business," he said.

Mr. Mendonca's price target is $80 (Canadian).

Also on the Street, CIBC World Markets trimmed it price target on RBC to $80 (Canadian) from $81, while reiterating a "sector outperformer" rating. "The results this time around were not as strong as they have been in recent quarters, but the diversified business mix delivered a solid result this quarter (helped by market-sensitive lines) and the outlook remains favorable," said CIBC analyst Robert Sedran.

The average price target among analysts for RBC shares is $73.15, according to Thomson First Call.

========

In other analyst actions:

Rafferty Capital downgraded Toronto-Dominion Bank to "hold" from "buy" and cut its price target to $93 (U.S.) from $100. TD reported earnings Thursday that missed Street expectations.

Canaccord Genuity upgraded Canadian Western Bank to "buy" from "hold" and raised its price target to $41 (Canadian) from $32.50. It said Canadian Western Bank has "a favourable positioning" towards its key bank themes for 2014, especially when it comes to better operating leverage and large exposure to higher-growth commercial loans. BMO Nesbitt Burns also raised its target to $41 from $36 and maintained an "outperform" rating.

RBC Dominion Securities downgraded Agnico-Eagle Mines to "sector perform" from "outperform" and cut its price target to $31 (U.S.) from $38. RBC tied the action to it reducing its long-term gold price assumption to $1,300 (U.S.) an ounce from $1,400. It expects the company will have negative free cash flow in 2014.

RBC Dominion Securities upgraded Franco-Nevada to "outperform" from "sector perform" and raised its price target to $53 (Canadian) from $43. "We have revised our Franco-Nevada model to update the existing operating royalties and new feasibility-development stage gold assets (Brucejack, Golden Meadows, Kirkland Lake, ABX royalty portfolio), which have the potential to add 8–12 per cent in annual revenue," explained analyst Stephen D. Walker.

Raymond James hiked its price target on Dollarama to $85 (Canadian) from $80 and maintained a "market perform" rating. Desjardins raised its price target to $94 from $90 and maintained a "buy" rating. Canaccord Genuity raised its price target to $95 from $90 and maintained a "buy" rating. CIBC World Markets raised its price target to $95 from $89 and maintained a "sector outperformer" rating. Credit Suisse raised its price target to $96 from $90 and maintained an "outperform" rating.

Jefferies upgraded Precision Drilling to "buy" from "hold" with an unchanged price target of $11 (U.S.).

Industrial Alliance Securities cut its price target on Major Drilling Group International to $7 (Canadian) from $7.75 and maintained a "hold" rating.

Evercore Partners raised its price target on Twitter to $52 (U.S.) from $43 and maintained an "overweight" rating.

Canaccord Genuity hiked its price target on Mitel Networks to $12 (U.S.) from $8 and reiterated a "buy" rating

BMO Nesbitt Burns upgraded LinkedIn to "outperform" from "market perform" and raised its price target to $270 (U.S.) from $235.

Jefferies downgraded The Gap to "hold" from "buy" and cut its price target to $40 US from $51.

Jefferies raised its price target on Boeing to $165 (U.S.) from $124 and maintained a "buy" rating.

Credit Suisse hiked its price target on Johnson & Johnson to $94 (U.S.) from $90 and maintained an "underperform" rating.

Goldman Sachs upgraded Dollar General to "conviction buy" from "neutral" and raised its price target to $71 (U.S.) from 64.

Cowen downgraded IBM to "market perform" from "outperform" and cut its price target to $165 (U.S.) from $234.

Citigroup upgraded Intel to "buy" from "neutral" with a price target of $28 (U.S.).

=======

For more analyst actions, breaking investing news and analysis, follow Darcy Keith on Twitter at @eyeonequities