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The BlackBerry PlayBook, that is set to be officially releases on April 19, photographed at RIM headquarters in Waterloo, Ontario on April 12, 2011. (Peter Power/Peter Power/ The Globe and Mail)
The BlackBerry PlayBook, that is set to be officially releases on April 19, photographed at RIM headquarters in Waterloo, Ontario on April 12, 2011. (Peter Power/Peter Power/ The Globe and Mail)

Eye on Equities

Canaccord cuts RIM targets again on "broad" sales losses Add to ...

Canaccord Genuity has more bad news for Research In Motion Ltd. after conducting another round of sales checks in May and early June: its data suggest the tech giant is continuing to suffer "broad" losses in smart phone sales.

The findings have prompted Canaccord analyst T. Michael Walkley to cut his price target for the second time in only a month, slashing it by $9 to $40.

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"Our North American channel checks indicated soft BlackBerry sales and high-end share losses to the iPhone and Android smart phones at all four tier-1 carriers," Mr. Walkley wrote in a research note today. "Additionally, our checks indicated weak sales of the PlayBook."

Furthermore, global store checks suggest slowing BlackBerry Torch sales in Western Europe at a time when competing Android-based phones are on the upswing.

"While we believe RIM's new BlackBerry operating system 7.0 smart phones will create an upgrade cycle within its enterprise base, we do not believe they are enough to stem consumer share losses to the iPhone and Android smart phones," he said.

Given these trends, Canaccord expects RIM to provide weak guidance for its fiscal second quarter when it releases results for the first quarter - which ended May 28 - on Thursday.

Mr. Walkley lowered his fiscal 2012 earnings per share estimate to $5.34 from $5.49, while trimming his forecast for fiscal 2013 to $4.99.

Downside: Mr. Walkley, who had just reduced his target by $12 in early May, cut it by a further $9 to $40.

That's now well below the consensus target price of $49, based on 42 analyst estimates compiled by Capital IQ.

One of the most bullish has been CIBC World Markets Inc.'s Todd Coupland. But he's also ramping down his expectations amid delays in getting new products out to market, today cutting his price target by $15 to $75 (U.S.). Read more about what Mr. Coupland had to say here .

Toromont Industries Ltd. "brings many of the desired attributes for long-term investing," and its spin-off of natural gas unit Enerflex Ltd. to shareholders allows the company to focus on its equipment business and pursue growth opportunities, said CIBC World Markets Inc. analyst Jeff Fetterly. But, concerned with its premium valuation against its capital equipment peers, he downgraded the stock to "sector performer."

Downside: Mr. Fetterly cut his price target to $22 from $38.

China imported 3 per cent less unwrought copper in May from the previous month, but Desjardins Securities Inc. analyst John Hughes attributes this to consumers working off existing inventories. He believes this de-stocking is nearing an end, with underlying Chinese demand remaining strong, buoying the outlook for copper produce Teck Resources Ltd.

Upside: Mr. Hughes rates Teck as a "buy," with a $76 price target.

Patheon Inc. reported lower fiscal second-quarter year-over-year revenues and earnings before interest, taxes, depreciation and amortization, amid a soft pharmaceutical outsourcing environment. Versant Partners analyst Douglas Loe believes the stock will trade sideways for a quarter or two, "or at least until quarterly revenue/EBITDA returns to historic levels."

Downside: Mr. Loe downgraded Patheon to "neutral" and cut his price target to $2.25 from $4.75.

Taseko Mines Ltd. reported a mildly disappointing first quarter, with fully diluted earnings per share of 5 cents less than half of the consensus. But Canaccord Genuity analyst Orest Wowkodaw noted this was largely due to a timing issue between production and sales, and he likes the company for its "very attractive" valuation against peers and strong near-term production growth - plus the possibility that the Prosperity project could eventually proceed.

Downside: Mr. Wowkodaw maintained a "buy" rating but lowered his price target by 50 cents to $6.75.

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