Niko Resources Ltd. has several short-term challenges that make it hard to appreciate the long-term potential of its exploration campaign, which should begin in earnest within a year, Canaccord Genuity analyst Melanie Love said.
Production volume is lower at at least three gas fields, and Niko may choose to exercise an option to increase its interest in three fields. "We estimate that this option will have a price tag exceeding $700-million, which the company is planning on funding with debt," Ms. Love wrote in a report.
Downside: She cut her price target to $79 from $97 and downgraded her rating on Niko to "hold" from "buy."
Canadian Pacific Railway's first-quarter results reflect extreme weather and have no impact on the stock's "underlying intrinsic value," Raymond James analyst Steve Hansen said. He pointed out that the sudden departure of chief operating officer Ed Harris won't be material either because Mr. Harris will continue to advise on and support key programs.
"Moreover, our conviction is further bolstered by CPs share price which, at 11.9 times our 2012 earnings per share estimate, more than discounts both of these issues," he wrote in a report.
Upside: Mr. Hansen rates CP "strong buy" and has a $74 price target on the stock.
Nucor Corp. is likely to face downward pressure on prices for hot-rolled coils as other North American steelmakers add to production capacity, CIBC World Markets analyst Michael Willemse said.
"We believe steel prices are likely to decline over the next few months, so there is likely some risk of share-price weakness for steel-related equities," he wrote in a report. "A recent increase in U.S. capacity utilization reflects improvements in steel demand, but also reflects some inventory building."
Downside: Mr. Willemse downgraded Nucor to "sector under-perform" from "sector perform" and has a $45 (U.S.) price target on the stock.
Silver Wheaton Corp.'s superior production-growth profile, low and stable cash costs, and its potential for future dividend growth make it a top pick for silver investors, RBC Capital Markets analyst Haytham Hodaly said.
"We have made significant upward revisions to our silver price outlook for the remainder of 2011 and beyond," the analyst wrote, forecasting silver at $36.50 an ounce by the fourth quarter, compared with an earlier projection of $19.64 an ounce.
Upside: "Given the 37 per cent potential return to our price target, we upgrade the shares to 'outperform,' while maintaining an 'average-risk' qualifier," the report said. RBC raised its price target to $57 from $50.
Methanex Corp.'s new low cost production is on track and likely to result in a dividend increase for investors, TD Newcrest analyst Paul D'Amico said.
"Management is shareholder-friendly and has a track record of utilizing excess cash to reward shareholders with dividend increases and/or share buybacks," he said. He also raised his forecast for the price of methanol, citing better fundamentals and an overall higher energy price environment.
Upside: Mr. D'Amico raised his price target to $35 from $30 and rates the stock "hold."