Shares in First Uranium Corp. FIU-T remain snuggled close to all-time lows after getting smacked Wednesday in response to weaker than expected fourth-quarter results. A resurgence in negative sentiment toward uranium producers after the Japanese nuclear crisis hasn't helped matters.
Raymond James Ltd. analyst Bart Jaworski thinks investors may be wise backing away from the stock for the time being.
“Despite the recent share price weakness, we still believe investors should use caution with FIU, given continued uncertainty over liquidity and permitting,” Mr. Jaworski said in a note.
First Uranium lost 9 cents (U.S.) per share in the quarter, 4 cents worse than Street estimates, with similarly disappointing cash flow figures. It also dropped its fiscal 2012 gold and uranium production guidance.
First Uranium is developing gold and uranium extraction operations at the underground Ezulwini mine and its Mine Waste Solutions tailings recovery facility, both in South Africa. It has a $150-million (Canadian) convertible debenture expiring in June of next year and another $175-million of debentures due in 2013.
The lower production levels will make it more difficult to pay off the debentures, Mr. Jaworski noted, although he retained a “market perform” rating on the stock - equivalent to a “hold.”
Downside: Mr. Jaworski cut his six- to 12-month price target by 30 cents to 70 cents to reflect lowered guidance and higher future funding requirements.
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Canadian consumers’ reluctance to open their wallets has prompted Versant Partners analyst Neil Linsdell to cut his valuations and financial forecasts for fashion retailer Le Château Inc. CTU.A-T through fiscal 2013.
Le Château’s attractive 8.3 per cent yield should help support the stock price and Mr. Linsdell sees little risk the dividend will be cut. But he believes shares won’t appreciate much until retail sales across the industry start to rebound - and he doesn’t see that happening until the latter part of the year.
Mr. Linsdell expects Le Château to report in early July a nearly 10 per cent drop in first-quarter sales, with earnings per share less than half of the 18 cents achieved last year.
Nevertheless, he still believes that “Le Château provides good value in this difficult market” and rates it a “buy.”
Downside: Mr. Linsdell cut his price target by $4 to $11.
Related: Canadians hit brakes on spending, Americans open their wallets
Neo Material Technologies Inc. NEM-T “is perhaps the best-positioned company in the rare earth space, as it can access the robust export market from its ultra low-cost Chinese manufacturing base,” said Canaccord Genuity analyst Yuri Lynk. He believes the shares, at 8.5 times 2012 estimated earnings per share, “appear dramatically undervalued.”
Upside: Mr. Lynk raised his price target by $1.50 to $13.50.
The market is underestimating the economic impact of Carrizo Oil & Gas Inc.’s CRZO-Q transition toward high-margin liquids development, contends Canaccord Genuity analyst John Gerdes. This shift is focused on the company’s Eagle Ford and Niobrara shale properties, which when combined with the start-up of the U.K. Huntington oil field next year, should take Carrizo’s cash margins to 20 per cent above its peers.
Upside: Mr. Gerdes raised his price target to $4 to $50 and maintained a “buy” rating.
Westport Innovations Inc. WPRT-Q reported a bigger quarterly loss than expected and announced the acquisition of Emer SpA, a provider of fuel systems for light vehicles. The $117.2-million (U.S.) purchase, as well as an increase in margin assumptions, prompted CIBC World Markets Inc. analyst Michael Willemse to raise his forward earnings estimates.
Upside: Mr. Willemse hiked his price target by $2.50 to $17.50 but continues to rate the company as a “sector underperformer” due to concerns about a potential slowdown in annual sales growth.
