Microsoft shares are up almost 37 per cent over the past year, largely on hopes that new boss Satya Nadella can re-energize the company.Eric Risberg/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.
Piper Jaffray has named Microsoft Corp. as a top pick for 2015, even after its 26 per cent gain this year.
Analyst Katherine Egbert is bullish on the stock thanks to improvement in margins and stabilized PC shipments. "Microsoft's current portfolio of hardware, mobile, cloud, consumer, enterprise, and search products are increasingly important in a post-PC world," Ms. Egbert was quoted by StreetInsider.com as saying in a research note.
Ms. Egbert expects Microsoft's gross margins - the proportion of each dollar of revenue that the company retains as gross profit - to hit 65.2 per cent in 2015, rising to 66.4 per cent in 2016. She forecasts operating margins to hit 31.1 per cent next year and 33.0 per cent in 2016.
The analyst reiterated an "overweight" rating and $54 (U.S.) price target on the stock. The analyst consensus price target over the next year is $49.84, according to Thomson Reuters data.
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BTIG analyst April Scee downgraded Procter & Gamble Co. to "neutral" from "buy," a reflection of the stock trading above her $92 (U.S.) price target.
Ms. Scee noted that Procter & Gamble shares outperformed some of its peers in 2014, but she wants to see better organic growth at the company before becoming more positive on the stock. She believes this will take at least 12 months.
The company's plans to purge brands will create a leaner, more focused organization, but this is unlikely to be a near-term catalyst for the stock, Benzinga.com quoted her as saying in a research note. In the meantime, she sees limited improvement to gross margins, and foreign exchange rates remain a headwind.
The analyst consensus price target for Procter & Gamble Co over the next year is (U.S.) $91.47. The analyst consensus price target over the next year is $91.47.
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Astronics Corp.'s recent acquisition of Armstrong Aerospace and the $88-million test systems contract awarded to the company have bolstered Canaccord Genuity's faith in the firm.
Analyst Ken Herbert says this purchase "appears to be a strong strategic fit" for the company.
He raised his estimate for sales in 2015 by $29-million to $707.1-million and bumped up his forecast for full-year earnings per share to $2.93 from $2.87 following these developments.
"We believe our revenue growth assumptions are conservative, based on what we see as continued strong aerospace retrofit demand," he said. "We believe better than industry growth, with acquisitions and upside relative to expectations, will continue to be key catalysts in 2015."
The analyst hiked his price target to $65 (U.S.) from $62 and kept a "buy" rating on the stock. The analyst consensus price target over the next year is $66.
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Timmins Gold Corp. has improved its financial position as it looks to develop a site in Mexico, says M Partners.
On December 24, Timmins said it had come to terms with Sprott Resource Lending Partnership to extend its existing $13-million credit facility though 2015.
"In our view, the extension of the credit facility should improve Timmins' financial flexibility as it develops the recently acquired Caballo Blanco property," said analyst Derek Macpherson.
The analyst added that news regarding the development of this asset is likely to fuel the stock over the short term. The project has yet to receive a permit from Mexican authorities.
Mr. Macpherson maintained his "buy" rating and $2.50 (Canadian) price target on the stock. The analyst consensus price target over the next year is $1.83.
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Canaccord Genuity analyst Stephen Berman continues to recommend investors buy shares in Continental Resources Inc., even after it announced last week a major cut in its capital expenditure plans for 2015.
The capex budget reduction to $2.7-billion next year from $4.6-billion will be accomplished by reducing its planned rig count in two separate regions in the United States. The company gave a production growth guidance range of 16-20 per cent for next year, down from the prior 23-29 per cent.
"We believe that reducing capex in this environment is the right move, especially given that all its 2015 oil volumes are unhedged," Mr. Berman said in a research note. "We continue to like the stock for its high-quality asset base and operational track record."
He reiterated a $68 (U.S.) price target on the stock. The analyst consensus price target over the next year is $51.19.
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In other analyst actions:
Rafferty Capital Markets downgraded BB&T Corp. to "hold" from "buy" with a price target of $41 (U.S.), down from $45.
Capital One Securities upgraded Southwestern Energy to "overweight" from "equal-weight" with a price target of $41 (U.S.).
Darcy Keith