Inside the Market's roundup of some of today's key analyst actions. This post will be updated with more analyst commentary during the trading day.
With the odds of a major U.S. carrier entering the wireless race in Canada looking like a long shot now, investors would be wise to buy shares in Rogers Communications Inc., says Macquarie analyst Greg MacDonald.
He upgraded Rogers today to an "outperform" rating from "neutral," citing the "assumption the competitive overhang is now largely gone."
Bidders in the upcoming 700-MHz spectrum auction in Canada will be publicly disclosed on Monday; the deadline to place a deposit was this past Tuesday. There have been few signals from major U.S. carriers AT&T, Verizon, T-Mobile and Sprint that they plan to participate.
Canadian telecom stocks rallied Wednesday, no doubt partly because of the U.S. Federal Reserve's decision to postpone the tapering of its $85-billion-a-month bond purchasing program. But Mr. MacDonald also thinks investors gravitated to the stocks in relief that it does not appear a Canadian invasion from a U.S. carrier is in the cards. And he believes more of that stock action could be in store.
"As optimism grows that a U.S. carrier will not bid on 700MHz spectrum, wireless stocks could rally with Rogers as the most likely beneficiary given its higher- than-average maturity and high exposure to wireless," Mr. MacDonald said in a research note.
That doesn't mean these stocks are in the clear. Regulatory risks are high that the federal government will impose future regulations that won't be in the best interests of the domestic telecom players, he points out. For that reason, he doubts Rogers stock will climb to previous highs within the next year.
"We think the stocks will resist rallying too much as the government will likely dig in its heels on the regulatory front as evidenced by the CRTC reviewing roaming agreements with tariffing as a likely outcome," he said.
He also foresees another risk for the large carries such as Rogers: the likelihood that private equity will bulk up the capital strength of new entrants and lead to their consolidation. "In our view, the market should not ignore this potential risk, particularly if further roaming regulation ensues. We would look for private equity to be bidders (this Monday), though we believe the market expects this."
Nevertheless, he recommends Rogers even while admitting there should be few operating catalysts for a rally in the near term. He notes its "valuation is relatively attractive and dividend growth outlook remains +10 per cent for the near term."
Target: Mr. MacDonald maintained a $47 (Canadian stock price). The average analyst price target is $49.14, according to Bloomberg data.
Canaccord Genuity has added Fiera Capital Corp. to its "Canadian Focus List" - a small group of companies that it considers favourite investment ideas.
Analyst Scott Chan commented that its recent acquisition of two U.S. asset managers signals that Fiera has "meaningfully enters the U.S. private wealth market" by adding about $8.5-billion in assets under management. "Moreover, the acquisitions build on the contribution from the higher margin private wealth segment," he said.
Target: Mr. Chan raised his price target to $15.25 from $14.25 and maintained a "buy" rating. The average target is $13.63.
Canaccord Genuity analyst Yuri Lynk said he is more confident in the long-term outlook for engineering services company Fluor Corp. after holding investor meetings with a couple senior executives.
He believes developments in the oil and gas sector is increasingly playing into the company's strength as being one of the few contractors able to execute on large, complex mega-projects.
"Management remains confident that Fluor will secure outsized market share of upcoming gas-monetization projects," he noted.
Target: My. Lynk raised his price target to $80 (U.S.) from $74 and reiterated a "buy" rating. The average target is $76.05.
Raymond James analyst Chris Thompson initiated coverage on Coeur Mining Inc. with an "outperform" rating, believing that the company is an emerging turnaround story.
Coeur, he argues, is "on the cusp of a renaissance" thanks to just having completed an aggressive five-year mine building and development program.
"Although operational challenges have plagued CDE in the past, we see the beginnings of operational consistency from the company and anticipate a re-awakening of market confidence in CDE which, we feel, will catalyze share price," Mr. Thompson said in a research note.
Under the five-year program, Coeur saw three of its four mines enter production.
He thinks an upcoming release of a three-year operational plan will be a key catalyst for the stock, given that it should provide investors with a better gauge on the path ahead.
Target: Mr. Thompson set an $18 (U.S.) price target. The average target is $16.09.
Deutsche Bank jacked up its price target on Tesla Motors Inc., citing encouraging signs about its margins and the demand for its electric automobiles.
"Based on conversations with management and monitoring information available on Tesla owners' blogs, we believe that the company is on track to modestly outperform third-quarter margin expectations, that demand has continued to grow in the U.S. and Europe, and that the production rate at Tesla's factory has continued to increase," analyst Dan Galves was quoted as saying at Streetinsider.com.
Target: Mr. Galves raised his price target to $200 (U.S.) from $160. The average target is $152.90.
In other analyst actions today:
S&P Capital IQ upgraded JPMorgan to "strong buy" from "buy" and raised its price target to $61 (U.S.) from $55.
Stifel Nicolaus upgraded Groupon to "buy" from "hold" and set a price target of $16.
Morgan Stanley downgraded Walt Disney to "equalweight" from "overweight."
Morgan Stanley upgraded Time Warner to "overweight" from "equalweight."
Goldman Sachs downgraded FedEx to "neutral" from "buy" with a target of $116 (U.S.), up from $112. Credit Suisse also raised its price target on FedEx to $115 from $111.
Goldman Sachs downgraded Boise Inc. to "neutral" from "buy" but raised its price target to $13 (U.S.) from $10.50.
Goldman Sachs downgraded Dr. Pepper Snapple to "sell" from "neutral" and cut its price target to $46 from $48.
Credit Suisse initiated coverage on Cisco Systems with an "underperform" rating and $21 price target.
For more analyst actions, breaking investing news and analysis, follow Darcy Keith on Twitter at @eyeonequities