Following all the commotion last week after Research In Motion Ltd. reported disappointing earnings but seemingly left the door open to a possible future takeover, it’s back to this: RIM has sunk to another nine-year low on the TSX, while rival Apple Inc. broke another record for an all-time high today.
RIM in early afternoon trading on the TSX was last quoted at $12.62 (Canadian) after hitting a low of $12.53, the lowest since 2003. On the Nasdaq, RIM is trading just a whisker above its multi-year low of $12.45 (U.S.) reached in December. Apple reached a high so far today of $634.66, eclipsing its last high of $632.21 from earlier this week.
Market speculation over RIM possibly being sold - which helped boost the stock the day after earnings last week - has subsided. Apple, meanwhile, has seen a number of recent analyst price target hikes, including a couple that project a climb to $1,000 (U.S.) or more over the next year.
Today, Jefferies analyst Peter Misek raised his price target to $800 from $699, partly on the belief that Apple’s widely anticipated television product launch could prompt even more consumer interest in iPads and iPhones. He thinks the Apple TV product may arrive before the year is out and could be called “iPanel” because of its potential to be a hub for gaming and other media, according to Forbes.com.
Supporting his belief are checks Mr. Misek conducted that indicated specialty components have begun to ship to Apple’s Asia panel suppliers.
So, here’s where the two companies stand right now in the analyst community, according to Bloomberg. The average price target on Apple is $688.86 (and has been rising quickly of late), with 50 buys, 6 holds and 1 sell rating. The U.S. listing of RIM has an average price target of $14.27, with 5 buys, 32 holds, and 16 sells.
Even though coal-market fundamentals are weak, the recent sell-off in shares of Norfolk Southern Corp. has been overdone, argues RBC Dominion Securities Inc. analyst Walter Spracklin. He thinks investors are too pessimistic in their expectations for 2012 coal volumes. “We remain confident that NSC shares represent a compelling investment opportunity with the stock currently trading at a historically low valuation multiple (10.1 times 2013 estimate earnings per share) and offering a 34 per cent potential return to our new target,” he said.
Upside: Mr. Spracklin upgraded Norfolk to “outperform” from “sector perform,” but trimmed his target by $1 to $90 due to weakness in coal volumes this quarter.
As many of its peers continue to run into operational difficulties, Cenovus Energy Inc.’s is delivering problem-free performance. CIBC World Markets Inc. analyst Andrew Potter expects this to continue and “investors will increasingly assign a premium valuation to dependable operators such as Cenovus.” He upgraded the stock to a “sector outperformer,” noting that it has one of the highest production and cash flow per share growth rates through 2016. “Overall, we believe the stock will continue to be highly sought after,” he said.
Upside: Mr. Potter maintained a price target of $45.
Related: Canadian crude discount squeezes oil patch
Well performance at Pinecrest Energy Inc. has been significantly below management’s guidance and the company is trading “very rich” to its net asset value, said CIBC World Markets Inc. analyst Adam Gill. He downgraded Pinecrest to “sector performer,” also pointing to the company’s high valuation relative to peers. “We find that this valuation premium is unwarranted in light of results that are not meeting expectations,” he said.
Downside: Mr. Gill cut his price target by 50 cents to $3.50.
Canaccord Genuity analyst Orest Wowkodaw upgraded Lundin Mining Corp. to a “buy,” citing the company’s recent share price weakness and a 5 per cent boost to his copper and zinc price forecasts for this year. The shares are now trading at an attractive valuation relative to peers, he added, and the company has a strong near- to medium-term growth profile thanks to its Tenke Phase II expansion, he said.
Upside: Mr. Wowkodaw raised his price target by $1 to $6.
Bed Bath & Beyond’s fourth-quarter earnings per share of $1.48 beat consensus estimates of $1.33 - and more impressively, the retailer has now beaten the high end of its guidance range for 13 consecutive quarters. Canaccord Genuity analyst Laura Champine noted that same-store sales growth was well above her expectations as she raised her fiscal year 2012 earnings per share estimates.
Upside: Ms. Champine raised her price target by $4 to $73 and reiterated a “buy” rating.