Looking for some stocks to stash away in your portfolio just before heading off to the beach or cottage for summer vacation? RBC Dominion Securities Inc. suggests Canadian integrated oil companies and senior producers are a reasonable bet.
RBC hiked its price forecasts for both Brent and West Texas Intermediate crude for this year and next, and suggests the nasty pullback of late in the energy equity sector might make for an attractive entry point.
For Brent, RBC now expects 2011 prices to average $110 (U.S.) per barrel, up from its earlier forecast of $106. For WTI crude it predicts an average of $97 this year, up from $96. In 2012, it forecasts Brent to average $114 and WTI $102.
"In our minds, Canadian senior and integrated producers are well positioned to benefit from the escalation in world oil prices given their two-thirds oil production weighting, while exposure to oil sands offers security of supply and a long resource life," analyst Greg Pardy said in a research note.
The second-quarter earnings season for the sector starts this Thursday, with Nexen reporting before markets open.
RBC believes that while the quarter will be mixed overall, Nexen is among the firms well positioned because of an above-average weighting toward light oil and exposure to the higher Brent prices. It also likes Canadian Oil Sands and Talisman Energy .
But its favourite stock remains Suncor Energy . "In a nutshell, we are looking for steady and reliable operating performance from Suncor during the balance 2011," he said.
Upside: RBC reiterated its price target of $55 on Suncor - which would represent a return of more than 43 per cent.
Desjardins Securities Inc. remains upbeat on BCE Inc. as the second-quarter reporting reason gets underway, predicting adjusted earning per share of 81 cents for the three-month period - equal to the average Street estimate. "We continue to prefer BCE among diversified large-cap companies in the telecom space, given that it provides the highest dividend yield and its valuations are not stretched," said analyst Maher Yaghi.
Upside: Mr. Yaghi affirmed his $41.50 price target.
Canaccord Genuity's U.S. store checks indicated strong sell-through trends for Apple Inc.'s iPhone and iPad in June. Analyst T. Michael Walkley raised his 2011 and 2012 iPhone sales estimates, and 2012 iPad projections, commenting that "we believe Apple will maintain dominant value share of both the tablet and smartphone markets to drive healthy long-term earnings growth."
Upside: Mr. Walkley hiked his price target to $500 from $485.
Clarus Securities Inc. analyst Nana Sangmuah is initiating coverage on Aureus Mining Inc. with a "buy" rating. "Aureus presents an opportunity to participate in a revaluation of a near-term (gold) producer with a proven management team and significant exploration upside potential on a large, untested 2,210 square-kilometre land package on three major greenstone belts in West Africa," he said.
Upside: Mr. Sangmuah set a 12-month price target of $2.50.
Despite expected subscriber losses in Portugal, Cogeco Cable Inc.'s Canadian operations are on a strong footing and the company's 18 per cent dividend hike last week won't be its last, said RBC Dominion Securities Inc. analyst Jonathan Allen. He expects Cogeco, which has low debt levels relative to earnings and a current payout ratio of less than 20 per cent of 2012 net income guidance, can "substantially increase its dividend over the next few years."
Upside: Mr. Allen raised his price target by $2 to $48.
- Crude Oil Front Month Futures$41.72+0.07(+0.17%)
- Canadian Oil Sands Ltd$8.56+0.23(+2.76%)
- Suncor Energy Inc$36.90+0.91(+2.53%)
- Bce Inc$57.48+0.35(+0.61%)
- Apple Inc$118.30+0.49(+0.42%)
- Aureus Mining Inc$0.13-0.15(-52.73%)
- Cogeco Cable Inc$64.90-0.85(-1.29%)
- Updated November 30 2:30 PM EST. Delayed by at least 15 minutes.