Inside the Market's roundup of some of today's key analyst actions
LinkedIn Corp. has been left behind in the broader market’s celebration today of the “fiscal cliff”-busting budget deal, and instead has withered more than 3 per cent on a downgrade from Barclays Capital
Analyst Mark May cut his rating to “equal weight” from “overweight,” concerned about LinkedIn’s valuation after the stock’s more than 75 per cent gain last year.
While he is still positive about the short- and long-term outlook, he notes that shares are trading at a premium to peers and believes his “bullish outlook” is now largely factored in.
He also thinks LinkedIn may provide calendar-year 2013 guidance below consensus expectations, given that management has historically provided a conservative outlook.
Upside: Mr. May has a 12-month price target of $125 (U.S.)
BMO Nesbitt Burns analyst Kenneth B. Zaslow upgraded pork processor and hog producer Smithfield Foods Inc. to “outperform” from “market perform.” He believes tight global hog supplies, resilient domestic pork demand and an expected pickup in export demand this year provide for a favourable outlook. “The recent overreaction to lower pork packer margins and the absence of hog liquidation creates a compelling investment opportunity,” he said.
Upside: Mr. Zaslow raised his price target by $2 to $28 (U.S.).
BMO Nesbitt Burns analyst Amit Sharma upgraded Hain Celestial Group to “outperform” from “market perform,” believing that a recent slide in the stock “has created a compelling entry point to own one of the most attractive growth stories in the U.S. packaged-food universe.
“Despite investors’ fear of top-line deceleration, measured channel trends appear to be stable or accelerating in four of Hain's five key segments in the U.S.,” Mr. Sharma said. “In fact, even in the baby food and Greek yogurt categories, which have garnered most investor attention, Earth’s Best pouch sales have more than tripled, and Greek Gods sales have posted 40 per cent-plus growth, over the last six months.”
Upside: Mr. Sharma has a target price of $67 (U.S.)
CIBC World Markets analyst Adam Gill is recommending investors buy shares in Argent Energy Trust in the wake of its recent $120-million (U.S.) acquisition of oil and gas assets from Wapiti Oil & Gas and Wapiti Energy. Argent issued $100-million in new equity to fund the deal and is taking on new debt. But Argent still has a strong balance sheet, commented Mr. Gill, and its payout ratio will decline to 116 per cent from 138 per cent.
Upside: Mr. Gill rates Argent “sector outperformer” with a price target of $12.25 (Canadian).
BMO Nesbitt Burns analyst Joanne Wuensch initiated coverage on Abbott Laboratories with an “outperform” rating, believing the stock deserves to be trading at a premium to peers based on price to earnings.
Abbott recently spun-off its Proprietary Pharmaceuticals business but still operates in four other distinct businesses.
“With leading market share positions and an extensive geographic footprint, particularly in the emerging markets (about 40 per cent of revenue), we expect the company to benefit from a focused management team and dedicated resources, to drive mid- to high-single-digit revenue growth, expand operating margins and deliver double-digit earnings per share,” said Ms. Wuensch.
Upside: Ms. Wuensch set a price target of $36 (U.S.).
For more analyst actions, breaking investing news and analysis, follow Darcy Keith on Twitter at @eyeonequities