Financials are a key component of both dividend aristocrat ETFs and dividend mutual funds.Fred Lum/The Globe and Mail
Inside the Market's roundup of some of today's key analyst actions. This file will be updated often during the trading day so check back for new details.
Analysts continue to sour on AGF Management Ltd. after the company reported a disappointing set of quarterly results on Wednesday.
Earnings per share from continuing operations came in below expectations, while net redemptions were larger than anticipated.
InterstarAGF Asset Management Inc., which is backed by the company, led a consortium that recently won a bidding war for the Billy Bishop airport terminal in Toronto in an attempt to diversify its business towards alternative investments as mutual funds continue to come under pressure from exchange-traded funds.
"While the shares at current levels may appeal to some deep-value investors and the removal of two overhangs may alleviate some near-term pressure, to us AGF is more of a show-me story, particularly management's ability to turn performance around, which could lead to an improvement from current net redemptions," said Desjardins Securities analyst Gary Ho. "The recent launch of InstarAGF funds is interesting, in our view, but would not move the earnings needle over the near term."
He maintained a "hold" rating on the stock while lowering his price target to $8.25 (Canadian) from $9.50.
The share price has tumbled by 25 per cent since the company announced a hefty 70 per cent dividend cut in early December.
Analyst Scott Chan of Cannacord Genuity also took a dimmer view of the company's prospects following this earnings report, noting that its retail business had low growth visibility heading into a seasonally strong RRSP season.
"We continue to believe a lower valuation (target multiple compared to historical) is warranted to reflect (1) lower growth prospects on the retail fund side (due to weaker fund performance and persistent net redemptions); (2) challenges in AGF's institutional segment; and (3) –15 per cent earnings before interest, taxes, depreciation, and amortization (investment management) growth forecast for fiscal 2015," the analyst said.
He kept a "sell" rating on the stock and reduced his price target to $7 from $8.
The average analyst price target is $7.88, according to Bloomberg.
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CIBC World Markets analyst Alex Avery upgraded Brookfield Canada Office Properties REIT to "sector outperformer" from "sector performer" in the wake of the company's fourth-quarter results.
Mr. Avery noted that "transitional vacancy and moderating property fundamentals" of Canadian office markets have weighed on short-term funds from operations and the company's unit price. As such, an opportunity has opened up for the company to be consolidated into parent Brookfield Property Partners LP, particularly in light of the recent rally in the latter's unit price.
He raised his price target to $32 (Canadian) from $28.50. The analyst consensus price target for Brookfield Canada Office Properties over the next year is $29.75, according to Thomson Reuters data.
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Exploration success at Canacol Energy Ltd.'s Clarinete-1 well has strengthened the bull case for the stock, said CIBC World Markets analyst Dave Popowich in upgrading the stock to "sector outperformer."
Clarinete-1 is the first well drilled at its recently acquired VIM 5 exploration and production contract. "In our view, the Clarinete discovery effectively confirms that Canacol will be able to meet the terms of its fixed price natural gas sales contracts, which are scheduled to commence in December 2015," Mr. Popowich said in a research note. "With 83 million cubic feet per day of sales volumes under contract, this project is expected to more than double corporate production later this year."
He raised his price target to $5 (Canadian) from $2.75. The analyst consensus price target for Canacol Energy Ltd over the next year is $4.95.
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UBS Securities has downgraded chipmaker Qualcomm Inc. to "neutral" from "buy" after the company lowered its full-year revenue and earnings outlook and confirmed that one of its chips was dropped by a large customer.
UBS analyst Stephen Chin said the rating downgrade is due to the pricing and margin pressure the company faces with low-cost China competition, the fact that its market share with Samsung has likely peaked, and that the company is still dealing with China's anti-monopoly regulator. "We lower our estimates on the outlook and take a more conservative stance on fiscal year 2016 earnings given the China risks," Mr. Chin wrote in a note.
UBS cut its target price to $64 (U.S.) from $81. The consensus is $79.53, according to Thomson Reuters.
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Even though Cenovus Energy cut its 2015 capital spending budget by 25 per cent due to low oil prices, Raymond James is keeping its "outperform" rating on the stock.
"We continue to remain constructive on Shares of Cenovus, predicated on our view that the company maintains a top-quality asset base, which should still generate attractive rates of return, even in a 'lower for longer price scenario," said analyst Chris Cox, noting that the company did not cut its dividend.
However, he cut his price target to $25 (Canadian) from $26. The consensus is $26.60.
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In other analyst actions:
Atlantic Equities downgraded Microsoft to "underweight" from "neutral" and cut its price target of $40 (U.S.) from $45.
Athabasca Oil was downgraded to "hold" from "buy" at Desjardins Securities. The target price is $2.50 (Canadian).
CGI Group was downgraded to "hold" from "buy" at Jefferies. The target price is $48 (Canadian).
Husky Energy was downgraded to "hold" from "buy" at Desjardins Securities. The target price is $26 (Canadian).
High Liner Foods Inc. was raised to "buy" from "market perform" at Cormark Securities with a target price of $26 (Canadian) per share.
MEG Energy Corp. was downgraded to "hold" from "buy" at Desjardins Securities with a target price of $23 (Canadian) per share.
Arctic Cat Inc. was raised to "outperform" from "neutral" at Robert Baird with a target price of $35 (U.S.) per share.
Freshpet Inc. was raised to "outperform" from "neutral" at Credit Suisse with a target price of $19 (U.S.) per share.
Infosys Ltd. was downgraded to "underperform" from "hold" at Jefferies with a target price of $29 (U.S.) per share.
Knoll Inc. was raised to "buy" from "hold" at BB&T Capital with a target price of $23 (U.S.) per share.
QUALCOMM Inc. was downgraded to "neutral" from "outperform" at Macquarie with a target price of $68 (U.S.) per share.
United Financial Bancorp Inc. was downgraded to "market perform" from "outperform" at Keefe Bruyette with a target price of $14 (U.S.) per share.
With files from Bloomberg News