Apple Inc. shares have risen more than 50 per cent so far this year, but Goldman Sachs believes the tech darling isn’t through with rewarding investors. The influential U.S. bank today raised its profit estimates and price target on Apple, expecting strong earnings next Tuesday when it reports its latest quarterly results.
“Despite recent volatility, we continue to believe Apple's shares are very attractive at current levels,” TheStreet quoted Goldman Sachs analyst Bill Shope as saying in a note. “It remains our top pick, and we'd be buyers ahead of March-quarter results.”
Goldman raised its 12-month target by $50 to $750 (U.S.). It also hiked its second-quarter revenue and earnings estimates to $36.9-billion and $10.18 a share, respectively, from $34.2-billion and $9.36 a share. Its full-year revenue and earnings forecasts were also jacked up for both 2012 and 2013.
Apple stock spooked investors at the start of this week by selling off more than 4 per cent, but returned to rallying mode on Tuesday. It’s trading near unchanged at midday today.
Apple’s retreat was partly blamed on worries that carrier partners may curtail their iPhone subsidies, which could damper future sales. Mr. Shope doesn’t seem to be very concerned.
“We expect solid March-quarter upside, which is likely to trigger healthy increases in iPhone, iPad and overall earnings expectations for the full year,” he said. He also is downplaying concerns that Apple will have alack of new product launches until the iPhone 5 arrives, possibly this summer.
“We believe recent investor concerns over a 'catalyst-light' June quarter are misguided, since this will be the first full quarter with a refreshed iPad, a lower-priced iPad 2, and a fully ramped iPhone distribution channel,” he said. “In other words, the June quarter is when many of the recent catalysts begin to fully manifest into earnings power.”
Canada’s second-largest bank remains a buy due to long-term North American scale advantages and a focus on growth, according to UBS analyst Peter Rozenberg. Despite headwinds such as continued low interest rates, low Canadian loan growth and regulatory risk, Toronto-Dominion Bank appears well positioned for growth, says Mr. Rozenberg. During a recent meeting with investors, management remained confident in delivering medium-term earnings per share growth of 7 per cent to 10 per cent due to growth initiatives and productivity improvements over time, he noted.
Upside: Mr. Rozenberg is maintaining his “buy” rating and $91 (Canadian) price target.
IBM Corp.’s first-quarter results “were solid from top to bottom,” commented Canaccord Genuity analyst Eyal Ofir, with only its Global Business Services division showing “a hint of weakness.” But even though IBM’s earnings guidance was revised higher than he was expecting, Mr. Ofir advises investors not to buy until there’s a better entry price.
Upside: Mr. Ofir raised his price target by $10 to $205 (U.S.) and maintained a “hold” rating.
A profitable niche market position, strong balance sheet and a full production schedule make Vancouver-based drilling services company Energold Drilling Corp. an attractive stock, says Cormack Securities Inc. analyst Maggie Johnson.
Ms. Johnson likes the solid demand in the mineral drilling sector as well as Energold’s ability to drill in frontier regions that are off limits to larger competitors. After its recent equity issue, she estimates Energold will exit first quarter 2012 with net cash of $30-million, enabling it to capitalize on any attractive opportunities.
Upside: Ms. Johnson is maintaining her “buy” rating and lowering her price target 25 cents to $7.50 (Canadian).
Canadian Helicopters Group Inc.’s decision to seek shareholder approval to change its name to HNZ Group Inc. should improve the company’s brand, according to Desjardins Securities Inc. analyst Beniot Poirier.
The name change aims to distinguish the company from CHC Helicopters, a provider of commercial helicopter transportation services, of which Canadian Helicopters Group is formerly a division.
Mr. Poirier believes CHL could emerge from 2012 debt-free and is actively looking at international acquisition opportunities in the offshore oil & gas and military support operations sectors.
“The name change, which is subject to the approval of shareholders and the Toronto Stock Exchange, should improve the company’s global brand and position it to pursue further international acquisitions to diversify its revenue away from Afghanistan,” he says.
Upside: Mr. Poirier is maintaining his “buy - average risk” rating and $35 (Canadian) price target.
Bankers Petroleum Ltd. is an undervalued stock that could become an attractive takeover target, said Raymond James Ltd. analyst Rafi Khouri. But unless one materializes, Bankers may remain near current levels until the company shows sustained production growth and/or positive results from its thermal wells, which could occur as early as the third quarter, he said.
Upside: Mr. Khouri cut his price target by $2 to $5 although he maintained an “outperform” rating.