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A Research In Motion BlackBerry Storm (LUCAS JACKSON/LUCAS JACKSON/REUTERS)
A Research In Motion BlackBerry Storm (LUCAS JACKSON/LUCAS JACKSON/REUTERS)

Eye on Equities

National Bank hikes price target on RIM Add to ...

Smart phones have become a must-have device, with shipments in 2010 nearing that of personal computers. And that type of blazing growth in demand is showing no signs of abating.

Shipments in last year's fourth quarter were so robust they took analysts at National Bank Financial by surprise, and today they raised their outlook on shipments through 2014. They now expect just over 400 million smart phone shipments in 2011, growing by just over 100 million units per year annually to reach unit sales of 731 million in 2014.

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That's good news for Research In Motion Ltd. , but the BlackBerry maker also has another factor National Bank analysts believe is working in its favour: Nokia Corp.'s decision this month to use Windows Phone as its main operating platform. The move means Nokia's own platforms, Symbian and MeeGo, will be tossed into the technology scrap heap and the Microsoft platform will go up against Apple's iPhone and Google's Android operating system in a three-horse race.

National Bank Financial analyst Kris Thompson says RIM will gain higher-than-expected market share as Nokia transitions to the Microsoft operating system and customers hesitate to go along with the shift.

It now forecasts BlackBerry shipments of 66.8 million units in fiscal 2012 and 77.3 million in 2013, up from earlier assumptions of 59.9 million and 67.9 million, respectively.

"We've phased out Nokia in our global forecast over the next two years, with Android being the major beneficiary in the near term," Mr. Thompson said in a note to clients. "We expect RIM to lose 0.5 per cent less market share in fiscal 2012 and 1 per cent less market share in 2013 and 2014."

Upside: Mr. Thompson hiked his price target by $5 (U.S.) to $80 and maintained his "outperform" rating. He's more optimistic than many of his peers; the median target price among analysts is $70, according to Capital IQ.

"Value deterioration" is occurring at most of Kinross Gold Corp.'s operations and development sites because of higher costs, warns CIBC World Markets Inc. analyst Barry Cooper. His net asset value and cash flow assumptions for the company have declined by 20 per cent for this year and 2012. Mr. Cooper said a lot now hinges on the ultimate size of the Tasiast project in Mauritania.

Downside: Mr. Cooper cut his price target by $4 to $22.

Related: Exploration costs eat into Kinross quarterly profits

Related: Miners getting pinched by inflation

Vecima Networks Inc. reported surprisingly weak second-quarter revenue and its guidance for the fiscal year doesn't indicate a rebound, said National Bank Financial's Kris Thompson. Product introduction delays are becoming too frequent, and "we are concerned that the company is not successfully managing a transition from legacy solutions," he said.

Downside: Mr. Thompson downgraded Vecima to "underperform" and cut his price target to $3 from $4.60.

CIBC World Markets Inc. analyst Barry Cooper has trimmed his 2012 cash flow assumptions for Barrick Gold Corp. by 6 per cent. But he still sees strong share appreciation for the gold producer, given its low cash flow and earnings multiples, especially "if new investment is attracted to the sector and safe haven status is sought."

Downside: Mr. Cooper cut his price target by $8 (U.S.) to $71.

While it is difficult to predict the outcome of the political upheaval in Libya, "it is premature to fully discount" SNC-Lavalin Group Inc.'s presence and potential in the country, said Desjardins Securities Inc. analyst Pierre Lacroix. SNC-Lavalin has two key projects in Libya that could generate sales of $200-million (Canadian), or about 3 per cent of total revenue, in 2011, he said.

Upside: Mr. Lacroix maintained his "buy-average risk" rating and $65 price target.

Related: Oil surges on upheaval in Libya

 
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