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.
Deutsche Bank analyst Jorge Beristain thinks shares in Barrick Gold Corp., already well off two-decade lows hit in early July, will continue their recovery now that the company has outlined plans for major cost cuts and other initiatives to return to profitability.
He upgraded the gold producer to "buy" from "hold" while boosting his share price target by 50 per cent.
"We believe that the risk of an equity issue has receded, thanks to a comprehensive program to shore up the balance sheet unveiled with second-quarter results," StreetInsider.com quoted him as saying.
Barrick announced a deal in August to sell three of its high-cost mines in Australia for $300-million, and is in talks on further asset sales, with the focus on divesting smaller, higher-cost mines. It also announced plans this summer to slash its dividend by 75 per cent, among other cash-saving steps.
Target: Mr. Beristain raised his price target to $30 (U.S.) from $20. The average analyst target, according to Bloomberg data, is $21.02 (U.S.).
Merck and Co.'s decision to narrow its geographical footprint and slash costs is good news for rival Valeant Pharmaceuticals International Inc., says BMO Nesbitt Burns analyst Alex Arfaei.
Mr. Arfaei said Valeant will face reduced competition and new product licensing opportunities as Merck scales back.
He boosted his forecast for Valeant's revenue in 2015 and 2016 by 1.1 per cent and 1.8 per cent, respectively, based on higher expectations in emerging markets.
Target: Mr. Arfaei raised his share price target to $123 (U.S.) from $109 and maintained an "outperform" rating. The average analyst target is $115.16.
Wet weather has prompted BMO Nesbitt Burns analyst Stephen Atkinson to cut his share price target on International Paper Co.
The Memphis-based timber products company faces higher costs accessing and logging hardwood during heavy rains in the southern United States, in addition to start-up allowances at its Russian joint venture with Ilum Holding.
But Mr. Atkinson said the company's 3.1 per cent dividend yield is the best of the packaging producers and notes the firm is planning a share repurchase program of up to $1.5-billion within three years. "Both initiatives should help support the stock during periods of market weakness," Mr. Atkinson wrote in a research note today.
Target: Mr. Atkinson reduced his share price target to $58 (U.S.) from $62 and reiterated an "outperform" rating. The average target is $55.86.
Canaccord Genuity analyst Robert Young has reduced his share price target for DragonWave Inc., saying the maker of wireless equipment's recent $25-million (U.S.) share sale alleviates but does eliminate fears over its depleting cash supplies.
In a research note on Wednesday, Mr. Young said DragonWave's efforts to boost revenue and become cash-flow positive are hampered by slow demand for microwave equipment.
The Ottawa-based company trades in Toronto and on the Nasdaq stock market, where its shares have fallen by 36 per cent this year. Mr. Young will be watching the company's quarterly earnings report on Oct. 9 for signs it is able to reverse a long streak of losing money.
Target: Mr. Young reduced his share price target to $2.10 (U.S.) from $2.60 and maintained a "hold" rating. The average target is $1.96.
Industrial Alliance Securities analyst Ben Jekic upgraded AirBoss of America Inc. to "strong buy" from "buy," applauding the company's growth strategy and prudent balance sheet management.
Airboss, a manufacturer of high-quality rubber compounds, announced Monday it is acquiring Flexible Products Co., a Michigan-based supplier of anti-vibration products for the North American auto industry, for $51-million (U.S.) in cash.
Mr. Jekic said the acquisition, expected to close on Oct. 16 and be immediately accretive to earnings and free cash flow, was made at a "reasonable price." He notes that Airboss will finance the transaction through new debt at very favourable interest rates compared to existing debt on the balance sheet.
Target: Mr. Jekic raised his price target to $9.25 (Canadian) from $7. The average target is $8.25.
RBC Dominion Securities is getting more bullish on network and software company Ciena Corp.
"Longer-term, we believe that Ciena's stock may exceed $33 if the company executes on improving its margins, cash-flows and earnings sustainability," analysts Mark Sue and Ameet Prabhu wrote in a research note on Tuesday.
The analysts expect Siena's 2013 revenue to rise by 13 per cent over last year with margins climbing to 6.1 per cent and per-share profit of 70 cents. In 2014, Ciena is expected to post 6 per cent revenue growth, 7.1 per cent margins and EPS of $1.
"Ciena believes it can grow faster than the market's expected growth rate of mid-to-high single-digits," the analysts wrote, noting the company is poised benefit as major U.S. wireless carriers upgrade their networks.
The Maryland-based company trades on the Nasdaq stock market, where its shares have risen by 65 per cent this year.
Target: RBC raised its price target to $28 (U.S.) from $24 and reiterated an "outperform" rating. The average target is $27.
RBC Dominion Securities analyst Robert Breza has raised his share price target for Proofpoint Inc., citing two recent acquisitions he said help set the company's software apart from the competition.
Proofpoint sells software that offers data protection, regulatory compliance and secure communication to large and mid-sized companies. Based in Sunnyvale, Calif., its shares have risen by 152 per cent this year on the Nasdaq stock market.
The company recently bought Sendmail, a messaging platform, and security software company Armorize. Both deals bring key features in-house and improve Proofpoint's security products, Mr. Breza said. "We like the acquisition and the strategy and believe there are likely similar opportunities to make smaller technology-based acquisitions in the future," Mr. Breza wrote in a research note on Wednesday.
Target: Mr. Breza raised his share price target to $35 from $30 and maintained a rating of "outperform." The average target is $31.89.
In other analyst actions this morning:
Deutsche Bank downgraded Alcoa to "sell" from "hold" and cut its price target to $5.50 (U.S.) from $9, citing a deteriorating outlook for aluminum.
Deutsche Bank downgraded Silver Standard Resources to "sell" from "hold" and cut its price target to $4.50 (Canadian) from $7.50.
Baird downgraded Tesla Motors to "neutral" from "outperform" and maintained a $187 (U.S.) price target.
UBS downgraded Baxter International to "neutral" from "outperform" and cut its price target to $73 (U.S.) from $81.
UBS cut its price target on TransGlobe Energy to $9 (Canadian) from $8.
UBS raised its price target on Walgreen to $55 (U.S.) from $45.
Canaccord Genuity raised its price target on Acuity Brands to $100 (U.S.) from $78 and maintained a "hold" rating.
Citigroup downgraded Randgold Resources Ltd. to "sell" from "neutral."
Buckingham Research raised its price target on Boeing to $136 (U.S.) from $122 and maintained a "buy" rating.
Benchmark initiated coverage on Imax with a "hold" rating and a price target of $29.42 (U.S.).
For more analyst actions, breaking investing news and analysis, follow Darcy Keith on Twitter at @eyeonequities