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(SEAN YONG)
(SEAN YONG)

Eye on Equities

CIBC cuts price target on Methanex amid Egypt unrest Add to ...

The crisis in Egypt has added to the headaches of Methanex Corp. , the Vancouver-based methanol giant that already faced production problems at various points on the globe.

The company produced its first methanol at its co-owned plant in Egypt just last month, none too soon given that Methanex failed to meet its company-wide production targets for 2010. A big concern has been its plants in Chile, which have been plagued by difficulties in getting natural gas from neighbouring Argentina, and other supply issues.

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Shares came under renewed pressure following the political unrest in Egypt last week, which forced the company to move international staff and curtail commissioning activities at its Damietta plant.

The 1.3-million-tonne-per-year plant was scheduled to begin production early this year and is part of Methanex's 60 per cent owned EMethanex joint venture. One-third of the project is owned by Egyptian Petrochemical Holding Co. and Egyptian Natural Gas Holding Co.

Citing the uncertainty surrounding Egypt, as well as the ongoing supply issues in Chile, CIBC World Markets Inc. analyst Jacob Bout today lowered his target multiple from 6 times to 5.5 times on Methanex's 2012 estimated cash flow per share.

Downside: Mr. Bout cut his price target by $4 (U.S.) to $29 a share and maintained his "sector performer" rating.

Read more: Rising demand for methanol puts focus on Methanex

Rogers Communications Inc. may run into some short-term pain due to the coming Industry Canada wireless spectrum auctions and Ottawa's foreign ownership review, said CIBC World Markets Inc. analyst Robert Bek. While this may mean more data competition, Mr. Bek still sees Rogers providing above-average returns over the next 12 to 18 months.

Downside: Mr. Bek cut his price target by $3 to $41.

While Gastar Exploration Ltd. is making significant strides toward a higher-margin liquids asset base, its shares are fairly valued, given that natural gas prices should stay below $5 per million BTU through next year, said Canaccord Genuity analyst Derrick Whitfield.

Downside: Mr. Whitfield downgraded Gastar to "hold" but reiterated his target price of $4.25.

Detour Gold Corp. announced a 30 per cent boost in its reserves to 14.9 million ounces, an increase that was more than double what UBS analyst Dan Rollins was expecting. The expected life of the company's namesake mine in Ontario was boosted to 21 years from 16 and a higher production rate is now expected.

Upside: Mr. Rollins hiked his 12-month price target by $1.50 to $42.50.

Valeant Pharmaceuticals International Inc. has purchased PharmaSwiss SA for 1.7 times trailing revenues - a "very cheap price" considering its sales are expected to grow 20 per cent annually, said UBS analyst Marc Goodman. PharmaSwiss will be a complementary business that could boost Valeant's earnings by 30 cents a share in 2012, he said.

Upside: Mr. Goodman raised his price target by $3 (U.S.) to $43.

Miranda Technologies Inc. has entered a period of "heightened opportunity" driven by a steadily improving broadcast infrastructure market and prospects arising from its Omnibus acquisition, said Canaccord Genuity analyst Robert Young. The company has made several contract wins in the past several months.

Upside: Mr. Young raised his target by $1.50 to $8.

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