Inside the Market's roundup of some of today's key analyst actions. This file will be updated with more analyst commentary during the trading day. For breaking analyst actions prior to market open every day, read our Before the Bell morning report.
Google Inc. shares sprinted to a record high today after the company's earnings beat late Thursday. Many analysts are jacking up their price targets in anticipation that the Internet giant's stock will keep climbing.
Google closed at $1.011.41 on the Nasdaq, up 13.8 per cent. It crossed the $1,000 mark for the first time ever shortly after market open.
Canaccord Genuity raised its price target on Google to $1,000 (U.S.); Evercore Partners and JPMorgan raised their targets to $1,100; Jefferies and Needham both raised their targets to $1,150; and Credit Suisse raised its price target to $1,200.
Deutsche Bank treated Google to one of its highest analyst price targets to date, raising its forecast for the stock to $1,220 from $970.
"Google reported solid third-quarter results that beat consensus for revenue and earnings per share by a few percent despite intra-quarter concerns that the rollout of Enhanced Campaigns would negatively impact advertiser behavior in the quarter," commented Canaccord Genuity analyst Michael Graham in a research note. Enhanced Campaigns let advertisers buy ads on multiple devices.
"Websites revenue growth accelerated despite continued CPC (cost-per-click) shrinkage and made up for a big deceleration in Network revenue. With many investors already expecting a strong fourth quarter from Enhanced Campaigns impact, getting past this potentially bumpy third quarter with a solid set of results should allow the stock to work well through year-end," Mr. Graham added.
Bullish Deutsche Bank analyst Ross Sandler said sentiment for Google should turn more positive from here. Looking into 2014, he sees several catalysts, including the revenue impact from Enhanced Campaigns and growing sales from display advertising and YouTube, as well as improving margins. "We have increased our 2014 estimated earnings per share by 14 per cent, and would continue to add to positions," said Sandler.
Credit Suisse analyst Stephen Ju was sounding similarly upbeat: "We continue to view Google as one of the best-positioned in our space to benefit from the proliferation of connected devices and the ensuing lift in engagement. And we view the volume growth as a leading indicator of where its top line growth can go as pricing on mobile will eventually close the gap with desktop," Mr. Ju said.
BMO Nesbitt Burns upgraded Wajax Corp. to "outperform" and raised its price target on the stock, which is up 5 per cent on the TSX this morning.
The company has preannounced weaker-than-expected third-quarter results, but BMO analyst Bert Powell believes the prospects of a weak second half to the year are now baked into the stock price.
"We believe the second half of 2013 will be challenging, but it is likely the trough," Mr. Powell said in a research note. "We expect a recovery to begin in 2014 driven by improvements in Power Systems and the Equipment group due to the growing Rotating Products business."
Wajax is involved in the sale of parts of mobile equipment, industrial components and power systems through a network of 177 branches across Canada.
He believes the company's dividend is safe despite a payout ratio approaching 100 per cent in 2013.
"As the company begins to face easier comparisons in 2014 and starts to register year-over-year earnings growth, we expect the shares to begin re-rating toward the average multiple. We see the short position of 1.2 million shares and the stock being out of favour with only one buy recommendation currently as additional catalysts for the stock once sentiment shifts and investors begin moving back into the name," he added.
Target: Mr. Powell raised his price target to $41.50 (Canadian) from $35.50.
Credit Suisse analyst Joseph Mastrogiovanni has raised his earnings estimates and share price targets for Verizon Communications Inc., the largest wireless carrier in the United States.
Mr. Mastrogiovanni raised earnings estimates for 2013 and 2014 by one per cent and three per cent, respectively, after the company posted better-than-expected results in the third quarter.
However, Mr. Mastrogiovanni said he is concerned the company could lose customers to AT&T, which could make it more difficult to repeat the growth it displayed in the third quarter. He also said Verizon is gaining post-paid customers at a rate that is slower than expected.
"We remain concerned that Verizon is starting to feel the effects of heavier competition," he said in a research note.
Targets: Mr. Mastrogiovanni raised his share price target to $53 (U.S.) from $52 and maintained a "neutral" rating.
BMO Nesbitt Burns raised its target on Verizon to $59 (U.S.) from $55 and maintained an "outperform" rating. Deutsche Bank upgraded Verizon to "buy" from "hold."
The average price target is $54.36, according to a survey of analysts by Bloomberg.
BMO Nesbitt Burns analyst Meredith Bandy upgraded Peabody Energy Corp. to "outperform" from "market perform."
Ms. Bandy said the U.S. miner of coal for electricity generators is set to benefit from a lower Australian dollar and a higher forecast for coal prices. She also sees the potential for cost improvements at Peabody's Australian mine, and says the company offers good value relative to its peers.
Peabody shares have fallen by 31 per cent this year.
Target: Ms. Bandy raised her share price target to $23. The Bloomberg average is $22.90.
In other analyst actions today:
M Partners placed Partners REIT "under review" after its its largest shareholder and its asset manager filed for creditor protection in Canada. It previously rated the REIT as a "buy" with an $8 (Canadian) price target.
UBS upgraded Amazon.com to "buy" from "neutral" and raised its price target to $385 from $305.
UBS upgraded CBOE Holdings to "buy" from "neutral" and raised its price target to $56 (U.S.) from $45.
Goldman Sachs upgraded Union Pacific to "buy" from "neutral" and kept a $176 (U.S.) price target. BMO Nesbitt Burns cut its price target to $174 but maintained an "outperform" rating.
Raymond James downgraded Sierra Wireless to "market perform" from "outperform" and cut its price target to $20 (U.S.) from $14.
Canaccord Genuity downgraded Fairchild Semiconductor International to "hold" from "buy" and cut its price target to $12 (U.S.) from $16.
Cantor Fitzgerald downgraded UnitedHealth Group to "hold" from "buy" and cut its price target to $70 (U.S.) from $75.
Barclays downgraded Navistar International to "underweight" from "equalweight" but raised its price target to $35 (U.S.) from $33.
BMO Nesbitt Burns downgraded Alpha Natural Resources to "underperform" from "market perform" and cut its price target to $4 (U.S.)
For more analyst actions, breaking investing news and analysis, follow Darcy Keith on Twitter at @eyeonequities