Inside the Market's roundup of some of today's key analyst actions. This file will be updated during the trading day. For breaking analyst actions prior to market open every day, read our Before the Bell morning report.
Canaccord Genuity Group Ltd. is capitalizing on the booming trade of equity issuance in the U.K., spurring RBC Dominion Securities analyst Geoffrey Kwan to hike his price target on the stock by 60 per cent.
He cited a rebound in both M&A activity and equity issuance globally, but credited the U.K. market with a substantial increase in Canaccord's earnings projections.
Traditionally, Canada has represented the company's largest market. "Canaccord's business is much more geographically diversified than before and near-term valuation upside is likely to be driven by improving conditions in the U.K.," he said.
In that market, equity issuance has risen by 135 per cent year to date over the prior year period. Over that time, Canaccord has led at least 10 U.K. deals totaling about $800-million versus four deals worth about $300-million at this time last year, Mr. Kwan said, citing Dealogic figures.
The U.K. segment was the company's biggest in the fourth quarter, contributing about 40 per cent of revenues.
Canadian capital markets, which have turned cold over the last couple of years along with the resource and energy sectors, are also picking up, providing additional potential valuation upside to Canaccord's stock.
And mergers and acquisitions have also spiked in the United States, where Canaccord has a small but growing business, Mr. Kwan said.
Those businesses together could double Canaccord's 2015 earnings over the current year, with a further 50-per-cent increase in 2016, Mr. Kwan said.
With those earnings projections, the stock is currently trading at 7.3 times next year's earnings, compared to Mr. Kwan's target of 9.0 times, which is still discounted to Canaccord's more-diversified peers.
"Our increased target reflects both EPS growth and slight multiple expansion as a result of improving earnings visibility," he said in a note.
Mr. Kwan upgraded Canaccord to an "outperform" rating from "sector perform," and increased his share price target to $12 (Canadian) from $7.50. The average analyst price target is $9.38, according to Bloomberg.
Canaccord shares are up 7.1 per cent at $9.40 in mid-afternoon trading.
Some analysts are trimming their price targets on Canadian Oil Sands Ltd. after the company late Thursday cut its production guidance for the Syncrude Canada oil sands mine in Alberta due to unplanned maintenance work at a coker unit.
A coker unit is a key component for converting oil sands bitumen into a lighter crude that can be processed at refineries. Canadian Oil Sands has lowered its estimate for Syncrude production in 2014 to a range of between 95 million and 105 million barrels from 95 million to 110 million barrels. The company has a 36.74 per cent stake in the Syncrude operation. Other owners are Imperial Oil, Suncor Energy, Chinese firms Sinopec and CNOOC, Mocal Energy and Murphy Oil.
National Bank Financial downgraded Canadian Oil Sands to "underperform" from "sector perform" and cut its price target to $21.50 (Canadian) from $22. Raymond James cut its target to $21 from $20.50 but maintained a "market perform" rating.
"The latest unplanned turnaround at Syncrude is unfortunately another string of operational disappointments at the project and we take this opportunity to reiterate ... the capital projects currently underway at Syncrude are not focused on what, in our view, is the most limiting factor to the project: upgrader reliability," said Raymond James analyst Chris Cox.
CIBC World Markets analyst Arthur Grayfer reiterated an "underperform" rating and $22.50 price target on the stock. "We are cautious on the improvement in Syncrude utilization and, in our view, the current dividend will be funded from debt over the next few years unless utilization improves or prices remain at current levels," Mr. Grayfer cautioned.
Canaccord Genuity analyst Phil Skolnick has some different advice for investors, however. He thinks share price weakness resulting from the coker outage -- the stock is down about 5 per cent this morning -- should be used as a buying opportunity.
"This is a reminder that unplanned outages do happen in the upgrading business; but they can also create buying opportunities," Mr. Skolnick said as he reaffirmed his "buy" rating and $28 price target.
He thinks Canadian Oil Sands will continue to benefit from the trend of Canadian energy players starting to look at exporting oil outside of the U.S., a weakening Canadian currency, and a significant jump expected in free cash flow and the dividend next year.
Shares in Amazon.com Inc. are sharply lower today as several analysts reduced their outlook for the stock in the wake of its quarterly earnings report late Thursday.
While Amazon.com's earnings were largely in line with Street expectations, analysts are concerned with its rising costs and a softer profit outlook.
Raymond James downgraded the company to "outperform" from "strong buy" and cut its price target to $391 (U.S.) from $443. RBC Dominion Securities cut its target to $400 from $425.
J.P. Morgan analyst Doug Anmuth cut his target to $350 from $365. "The company continues to execute well against several large long-term opportunities though near-term deceleration in media, lower unit growth, and continued heavy investments are likely to keep shares range-bound in the near-term," he cautioned.
The median price target among analysts is now $430, down from $437.50 prior to the earnings release.
Shares in Amazon.com in early afternoon trading were down nearly 9 per cent at $306.90.
In other analyst actions:
Canaccord Genuity downgraded Exco Technologies to "hold" from "buy" citing valuation and maintained a $9.25 (Canadian) price target.
Canaccord Genuity upgraded Secure Energy Services to "buy" from "hold" and raised its price target to $22.50 (Canadian) from $18. It believes the company has a strong competitive advantage, given that establishing new oilfield waste treatment facilities is time-consuming, and the company is well positioned to benefit from prospective liquefied natural gas development in Wester Canada.
CIBC World Markets upgraded Catamaran to "sector outperformer" from "sector performer," citing compelling valuation, and maintained a $60 (Canadian) price target.
CIBC downgraded FirstService to "sector performer" from "sector outperformer", citing valuation, and kept a $56 (Canadian) price target.
Raymond James cut its price target on Domtar to $130 (U.S.) from $140 and maintained an "outperform" rating after its latest earnings miss. RBC also cut its target to $130 from $140 but reiterated its "top pick" rating, while National Bak Financial raised its target to $130 from $120 and reitearted an "outperform" rating.
BMO Nesbitt Burns raised its price target on Mullen Group to $33 (Canadian) from $29 and maintained a "market perform" rating.
Raymond James hiked its price target on Caterpillar to $105 (U.S.) from $94 and kept a "market perform" rating. BMO Nesbitt Burns raised its target to $120 from $96 and maintained a "market perform" rating.
Goldman Sachs raised its price target on Microsoft to $33 (U.S.) from $29 and maintained a "sell" rating.
BMO Nesbitt Burns upgraded Wells Fargo to "outperform" from "market perform" with a price target of $55 (U.S.), up from $53.
Craig-Hallum downgraded General Motors to "hold" from "buy" and cut its price target to $37 (U.S.) from $41.
Pivotal Research upgraded Time Warner Cable to "buy" from "hold" and raised its price target to $175 (U.S.) from $135.
Deutsche Bank upgraded Baidu to "buy" and raised its price target to $229 (U.S.) from $178.
ISI Group upgraded D.R. Horton to "strong buy" from "buy" with a price target of $28 (U.S.).
BMO Nesbitt Burns downgraded Fifth Third Bancorp to "market perform" from "outperform" and cut its price target to $22 (U.S.) from $23.
Canaccord Genuity upgraded RTI Surgical to "buy" from "hold" and raised its price target to $5 (U.S.) from $4.
Pivotal Research cut its price target on Sirius XM Radio to $3.75 (U.S.) from $4.25 and maintained a "buy" rating.
For more analyst actions, breaking investing news and analysis, follow Darcy Keith on Twitter at @eyeonequities