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Toronto-based Sherritt International Corp. operations are seen in this file photo.Rogelio V. Solis/The Associated Press

Inside the Market's roundup of some of today's key analyst actions. This file will be updated during the trading day.

The recent rally in nickel prices appears to be sustainable, improving the outlook for a number of Canadian mining companies, according to CIBC World Markets analyst Tom Meyer.

Nickel rose sharply after Indonesia, the world's largest nickel miner, prohibited exports of raw ore in an effort to support a domestic smelting industry. Delays at some other major, higher-cost nickel projects around the world have cut into future supply forecasts, Mr. Meyer said.

"We believe nickel prices have bottomed … and will likely hold onto the recent gains driven by the reduction of nickel supply as a result of the Indonesian nickel ore ban."

CIBC has raised its estimated nickel prices by 20 per cent for the third quarter, to $9 (U.S.) per pound from $7.50. Molybdenum price estimates, meanwhile, have increased by 40 per cent to $14 per pound from $10 by next quarter.

"The increase to our molybdenum and nickel price forecasts results in higher cash flow and net asset value estimates for those companies with the highest exposure to these metals," Mr. Meyer said.

CIBC upgraded Sherritt International Inc. to a "sector outperformer" from a "sector performer," and raised its share price target to $6.50 (Canadian) from $5.

"Sherritt is one of the few equities globally that can offer meaningful nickel exposure, and is attractively priced should an optimistic scenario for the nickel market indeed play out," Mr. Meyer said.

And share price targets were hiked for the following companies, all of which retain their current ratings: First Quantum Minerals Ltd. rose to $28 from $25 with a "sector outperformer" rating, Lundin Mining Corp., rated a "sector performer," improved to $6 from $5, and Thompson Creek Metals Company Inc. target increased to $4 from $3.50, remaining a "sector performer."

HudBay Minerals Inc., meanwhile, was downgraded as a result of its recent share price appreciation. After rising by about 25 per cent since mid-March without a change in target price, Hudbay's rating was changed to "sector performer" from "sector outperformer" at an $11 target price.

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RBC Dominion Securities analyst Haran Posner downgraded Transcontinental Inc. to "sector perform" from "outperform," as the stock price is now trading near his target of $16 (Canadian).

"TCL has outperformed the broader media group year-to-date despite weaker-than-expected operating performance in the last two quarters," Mr. Posner said. "Over 80 per cent of TCL's revenues are linked to advertising and marketing budgets. Reflecting a continued softness in print advertising, we have made modest downward revisions to our estimates. While our $16 price target is unchanged, the implied total return to our target is now modest (+4 per cent), and we would look for a more attractive entry point."

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BMO Nesbitt Burns analyst Peter Sklar hiked his price target on Saputo Inc. based on rising earnings in the current fiscal year over last year.

The Montreal-based dairy giant reports its fiscal fourth quarter results on June 5. Higher cheese and whey prices should be offset by expected losses at Warrnambool Cheese and Butter Factory Co., the Australian company in which Saputo recently acquired a majority interest.

"While we believe the Warrnambool acquisition will be accretive to Saputo's annual earnings, Warrnambool has typically … generated losses during its fiscal second half," Mr. Sklar said.

BMO adjusted its valuation base year to Saputo's fiscal 2015, which began on April 1, resulting in an increased target price of $66 (Canadian), up from $57, and an unchanged rating of "outperform."

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Deutsche Bank analyst Brian Modoff upgraded Cisco Systems Inc. to "buy" from "hold" and raised his price target to $30 (U.S.) from $25.

Mr. Modoff is feeling more bullish on the stock after meeting with management and buyers, especially given improving macro-economic growth.

"A mosaic view from our meetings with the networking IT channel, IT buyers, and senior management at Cisco Live gives us conviction on a stronger-than-anticipated ramp of Cisco's new platforms in Datacenter Switching, Next Gen Routing and Security, Wireless, and Cloud IT Services heading into the fiscal year ending July quarter and into fiscal year 2015," StreetInsider.com quoted him as saying.

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Raymond James analyst Alex Terentiew has initiated coverage on Altius Minerals Corp., North America's largest non-precious metals focused royalty company, with an "outperform" rating and $19.50 (Canadian) price target.

He recommends the stock given that it provides investors with exposure to long-term, relatively stable cash flows, without linking returns to gold and silver prices.

"In our view, Altius' growing cash flow, derived from its Canadian-based, high-quality and long-life asset base, diligent and patient management team, as well as its attractive valuation, position Altius as a compelling investment opportunity," he said.

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Desjardins Securities analyst Keith Howlett is not convinced by the estimates being put forward by SunOpta Inc.'s management.

While SunOpta's go-to-market approach toward higher value-added products within the natural and organic food segment should improve profit margins over the next two years, Mr. Howlett says management's target of an 8 per cent earnings before interest and taxes margin in 2016 still appears overly optimistic.

Mr. Howlett is maintaining his "sell – average risk" rating and $10.25 (U.S.) price target. The analyst consensus price target over the next year is $13.43, according to Thomson Reuters.

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In other analyst actions:

Cowen and Co. initiated coverage on Transforce with an "outperform" rating and $26 (Canadian) price target.

Paradigm Capital cut its target on Pinecrest Energy to 10 cents (Canadian) from 20 cents, with a "hold" rating.

Goldman Sachs upgraded Office Depot to "buy" from "neutral" and raised its price target to $7 (U.S.) from $5.40.

Goldman Sachs downgraded Staples to "sell" from "neutral" and cut its price target to $11 (U.S.) from $11.50.

Topeka Capital upgraded Bonanza Creek Energy to "buy" from "hold" with a price target of $68 (U.S.).

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