Underground tunnels at Cameco's Cigar Lake. On Friday, Cameco and Vena Resources said they are selling their 50-50 partnership in a Peruvian uranium company to Canadian venture company Azincourt Uranium.
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.
BMO Nesbitt Burns analyst Stephen Macleod downgraded Rogers Sugar Inc. to "underperform" from "market perform," warning that earnings growth at the company will be difficult to achieve over the next 12 months.
He also cut his price target to $4.25 (Canadian) from $5.
Rogers Sugar this week reported first-quarter results that showed a 22 per cent drop in earnings per share from last year, due to several factors that include a shift in its sales mix and lower margins in its consumer segement.
"We expect this challenging backdrop to persist through 2014, with adjusted gross margin per metric tonne forecasted to decline, despite flat refined sugar volumes, driven by competitive pricing in the domestic consumer, industrial and liquid segments, and lower pricing for U.S. exports," Mr. Macleod commented in a research note. "We also note that higher energy costs in fiscal 2014 could also weigh on earnings."
"Many of these factors are outside of the company's control, and there are limited opportunities to adjust the cost structure or pursue growth in other markets, providing a headwind to earnings growth," Mr. Macleod added as he lowered his earnings estimates in 2014 and 2015.
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Investors don't seem too pleased with Cameco Corp.'s announcement this morning that it is selling its 31.6 per cent stake in Bruce Power to BPC Generation Infrastructure Trust for $450-million: shares are off more than 2 per cent in early trading.
But Cantor Fitzgerald Canada analyst Rob Chang sees some positives in the deal, most notably Cameco is now off the hook for paying for expensive nuclear refurbishments at Bruce Power in the future.
"While cash flows from the electricity division is worth about $1.1-billion to Cameco, the company dodges a potential $2-billion bullet from refurbishment costs for the four Bruce Power reactors," Mr. Chang pointed out in a research note. "The company exits a non-core business and will have an additional $450-million to spend on potential acquisitions."
"With $273-million currently in the bank as of Q3/13 and positive cash flows expected in 2014, the company will have ample cash and available debt facilities to make acquisitions of almost any size," he added.
He thinks there are two likely targets for such an acquisition: Denison Mines and Fission Uranium.
Mr. Chang maintained a "buy" rating on Cameco shares and $29.35 (Canadian) price target.
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In other analyst actions:
Deutsche Bank upgraded Domtar to "buy" from "hold" and raised its price target to $115 (U.S.) from $95.
Canaccord Genuity upgraded BlackPearl Resources to "buy" from "hold" and raised its price target to $3.50 (Canadian) from $2.75.
Raymond James upgraded Norbord to "outperform" from "market perform" and maintained a $34 (Canadian) price target.
Canaccord Genuity cut its price target on MBAC Fertilizer to $1.85 (Canadian) from $2.75 and maintained a "speculative buy" rating.
Raymond James raised its price target on Canadian Pacific Railway to $192 (Canadian) from $184 and maintained an "outperform" rating.
Industrial Alliance Securities raised its price target on Pason Systems to $27 (Canadian) from $25 and maintained a "buy" rating.
RBC Dominion Securities raised its price target on Google to $1,400 (U.S.) from $1,300 and maintained an "outperform" rating. BMO Nesbitt Burns raised its price target to $1,050 from $890 and maintained a "market perform" rating. Canaccord Genuity raised its price target to $1,370 from $1,000.
Goldman Sachs raised its price target on Amazon.com to $460 (U.S.) from $450 and maintained a "buy" rating. Cowen and Co. raised its price target to $440 from $423 and maintained an "outperform" rating.
Raymond James raised its price target on Methanex to $72 (U.S.) from $68 and maintained an "outperform" rating.
Raymond James downgraded Silvercrest Mines to "market perform" from "outperform" and cut its price target to $2.05 from $2.16.
Raymond James downgraded Yamana Gold to "market perform" from "outperform" and cut its price target to $11 (U.S.) from $12.
JPMorgan upgraded United Continental to "neutral" from "underweight" and raised its price target to $53.50 from $40.50.
Credit Suisse upgraded SunCoke Energy to "outperform" from "neutral" and raised its price target to $24 (U.S.) from $19.
For more analyst actions, breaking investing news and analysis, follow Darcy Keith on Twitter at @eyeonequities
Darcy Keith