These are some of the key analyst actions on Bay Street today. For more analyst actions, investing news, actionable trading ideas and analysis, follow Darcy Keith on Twitter
Could the bloodbath in Research In Motion Ltd. stock be over?
Shares are up 16 per cent since a low of $6.66 was hit on July 20, as investor sentiment has taken a rare turn for the better (or, at least, bargain hunters have been brave enough to start making a wager on the embattled BlackBerry maker.)
UBS has a warning for those thinking the worst days for RIM are over. Risks still abound, it cautions, and there are few catalysts in the near term that would propel the stock. It reiterated a “neutral” rating today while cutting its price target by $1 to $9.50 (U.S.).
Analysts at UBS believe the modest rebound in the stock reflects increased optimism about potential M&A deals (the most recent rumour has IBM sniffing around RIM’s network operations), asset sales, cost cutting, partnership opportunities and the favourable outcome from a patent lawsuit involving MFormation.
“Nevertheless, we see operating losses and no major catalysts over the next two quarters and remain on the sidelines as we believe the company’s future likely hinges on a favourable BlackBerry 10 product launch early next year,” UBS said in a research note.
“We believe M&A remains the most likely outcome for RIM longer term, but think management needs to first stabilize the business via cost cutting and operating expenditure control.”
UBS also warns investors not to put too much value on RIM’s IT patents. Recent intellectual property deals, including InterDigital/Intel and Fujifilm/Universal Display, and press reports suggesting lower-than-expected bids for in the auction for Kodak patents, imply declining prices for tech patents. “In this environment, we think it may prove more difficult for RIM to unlock value from patents closer to book value,” it said.
Much of the Street appears to have a similar view on RIM right now. The average target is $7.68 (U.S.), slightly below the current trading price, Bloomberg data show. Only one analyst has a buy rating, 28 have hold ratings and 19 rate the stock as a sell.
RBC Dominion Securities has dramatically scaled back its outlook on Groupon after the company’s disappointing earnings report late Monday, which included weaker-than-expected third-quarter guidance. RBC believes the euro crisis will continue to stem growth in the company. “While management appears to be taking steps to manage the headwinds in Europe (improving offering mix and investing in tech platform for enhanced merchant service), the headwinds are likely to persist for the time being, and the continued deceleration in growth keeps us on the sidelines,” it said.
Upside: RBC slashed its price target to $10 (U.S.) from $17, and reiterated a “sector perform-above average risk” rating.
Read more: Groupon revenue misses expectations
Thompson Creek Metals Company Inc.
Weakening molybdenum prices have prompted TD Securities analyst Craig Miller to downgrade Thompson Creek Metals to "hold" from "buy." He also cut his price forecasts through 2015 for the metal, which has been hurt by the ongoing recession in Europe, the sluggish recovery in the U.S., and slowing GDP growth in China.
Upside: Mr. Miller cut his target price by 50 cents to $3.50 (Canadian).
New Flyer Industries Inc.
Canaccord Genuity analyst David Tyerman downgraded New Flyer Industries to "hold" from "buy" after the company's second- quarter earnings came up well short of Street expectations. But he notes better days may be on the horizon, as New Flyer said it expected second half 2012 adjusted EBITDA to exceed the first half results due to such factors as a better sales mix and operating improvements.
Downside: Mr. Tyerman maintained a $7.25 price target.
Claude Resources Inc.
Claude Resources disappointed the Street with its second-quarter results, largely because of higher costs and lower production at its Seabee project in northern Saskatchewan. But Desjardins Securities analyst Brian Christie notes costs should improve significantly later this year due to a shaft deepening and mill expansion, and he believes the recent sell-off in shares makes the company an acquisition target.
Upside: Mr. Christie cut his price target by 30 cents to $1.30 and maintained a "buy" rating.