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.
BMO Nesbitt Burns analyst Randy Ollenberger downgraded Imperial Oil Ltd. to "underperform" after disappointing first-quarter results.
He maintained a $53 (Canadian) price target.
Imperial Oil reported adjusted earnings of $1.09 a share, below the consensus expectation of $1.18, due to weak results in the company's upstream energy business.
Mr. Ollenberger lowered his 2014 earnings estimate to $4.54 a share from $4.81, but maintained his 2015 estimate of $4.84.
"We are lowering our rating to underperform as the company has achieved our target price and we believe better investment opportunities exist," he said in a research note.
"Imperial Oil's shares have outperformed peers so far in 2014, presumably due to expectations of growing Kearl Lake production and eagerly anticipated free cash flow in 2015. At current prices, the shares reflect a 2014E EV/EBITDA multiple of 8.8x, which is a significant premium to the group average of 5.6x (ex-Imperial). Historically, the premium to the group was warranted because of the company's industry-leading return on capital and consistent share buyback program; however, this is no longer the same Imperial Oil, at least for now. The company has roughly tripled the capital employed in the business over the last five years and the new capital will not generate the same returns as the old. We do expect the company to begin generating significant free cash flow after the Kearl Lake expansion is complete, but its peers are generating more. Accordingly, we see limited justification for an expansion in valuation multiples relative to its peers," Mr. Ollenberger said.
BMO Nesbitt Burns analyst Michael Mazar upgraded global energy services company Shawcor Ltd. to "outperform" from "market perform" and raised his price target to $54 (Canadian) after the company reported "exceptional" first-quarter results.
"We are upgrading Shawcor Ltd. in light of the earlier-than-expected directional shift in the revenue backlog, the still solid bid book and our expectation for a further ramp-up in both global and North American infrastructure spending. While the backlog may exhibit near-term volatility, we believe the medium- to longer-term bias is upwards and expect the backlog to reach near-record levels by the end of 2014 driven by contract awards that should also provide a catalyst for the shares," Mr. Mazar said in a research note.
"We are substantially raising our 2014 and 2015 earnings estimates to $3.03 and $4.05 from $2.40 and $2.74, respectively, reflecting the strong financial performance delivered in Q1/14, the growing backlog and our expectation for further increases in global infrastructure spending over the next two years."
Bombardier Inc.'s long-term prospects look good, but investors shouldn't look for any sharp upside any time soon, says Canaccord Genuity analyst David Tyerman.
"Bombardier has good-long term prospects from new products and upside performance potential for Bombardier Aerospace and Bombardier Transportation," he says in a research note.
"However, payoff from these opportunities is likely to take considerable time and there are material risks in both probability and timing to the future cash flows."
He adds that first quarter 2014 results were "well below potential" due to margin weakness in both the BA and BT segments. "BA is suffering from weak demand in certain product lines and low overhead absorption, while certain BT programs are generating margins well below target."
Mr. Tyerman maintains his "hold" rating and is raising his target price to $4.25 (Canadian), from $4.00. The analyst consensus price target over the next year is $4.25, according to Thomson Reuters.
CIBC World Markets analyst Jeff Killeen is initiating coverage of Reservoir Minerals Inc. with a "sector outperformer" rating and $9 price target.
"We believe high grades, a firm balance sheet, significant exploration upside and an experienced joint venture partner give RMC the advantage investors seek in today's market," he says.
Mr. Killeen adds that Reservoir's Timok operation in Serbia hosts an impressive high-grade copper and gold deposit, which is the basis of his valuation.
The analyst consensus price target over the next year is $9.65.
In other analyst actions:
Desjardins Securities hiked its price target on SNC-Lavalin to $61 (Canadian) from $55 and reiterated a "buy" rating after the company sold its AltaLink electricity transmission company to Berkshire Hathaway Energy.
Industrial Alliance Securities upgraded CCL Industries to "strong buy" from "buy" and raised its price target to $133 (Canadian) from $122.
CIBC World Markets hiked its price target on Maple Leaf Foods to $22 (Canadian) from $19 and reiterated a "sector outperformer" rating.
Credit Suisse raised its price target on Agnico Eagle Mines to $41 (U.S.) from $39 after it reported much-better-than-expected quarterly results.
CIBC World Markets hiked its price target on Detour Gold to $14 (Canadian) from $12.50 and reiterated a "sector outperformer" rating. Beacon Securities raised its target to $13 (Canadian) from $12.25 but downgraded its rating to "hold" from "buy," citing price appreciation.
BMO Nesbitt Burns initiated coverage on Bellatrix Exploration with an "outperform" rating and $14 (Canadian) price target.
Acumen Research raised its price target on Input Capital to $3.50 (Canadian) from $3.05 and reiterated a "speculative buy" rating.
Raymond James upgraded Mercer International to "outperform" from "market perform" and raised its price target to $10.50 (U.S.) from $9.50.
CIBC World Markets upgraded Sierra Wireless to "sector performer" from "sector underperformer" and hiked its price target to $20 (U.S.) from $12.
0Several analysts cut their price targets on LinkedIn in the wake of the company's quarterly results late Thursday, including BMO cutting its target to $250 (U.S.) from $270, RBC cutting to $230 from $250, and Cowen cutting to $175 from $220.
Goldman Sachs upgraded General Dynamics to "neutral" from "sell" and raised its price target to $112 (U.S.) from $102.
ISI Group upgraded Dynegy to "strong buy" from "buy" and raised its price target to $40 (U.S.) from $30.
Sterne Agee upgraded Wynn Resorts to "buy" from "neutral" and raised its target to $260 (U.S.) from $225. Credit Suisse raised its target to $220 from $195.
Bernstein downgraded Cabot Oil & Gas to "market perform" from "outperform" and maintained a $40 (U.S.) price target.