A pilot taxis a WestJet Boeing 737-700 to a gate in Vancouver on February 3, 2014.DARRYL DYCK/The Canadian Press
Inside the Market's roundup of some of today's key analyst actions. This file will be updated during the trading day.
A bullish outlook for Groupon Inc. was issued by U.S. investment bank B. Riley & Co. today.
Analyst Sameet Sinha upgraded Groupon to "buy" from "neutral" and raised his price target to $9.50 (U.S.) from $6, noting that the company is entering a period where comparisons from a year ago will be easier on investors' eyes.
He sees several initiatives at Groupon, including ramping up marketing efforts and better technology deployment, aiding the company in meeting its year-end earnings and revenue targets. "Our upgrade rests a lot on management delivering on their promise, which we feel is achievable based on our sensitivity analysis," MarketWatch.com quoted Mr. Sinha as saying.
The analyst consensus price target for Groupon over the next year is $8.38 (U.S.), according to Thomson Reuters data.
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WestJet Airlines Ltd.'s decision to add widebody aircraft to its fleet introduces a number of new risks that will need to be carefully managed, cautioned AltaCorp Capital Research analyst Chris Murray.
These new risks and challenges include financing more expensive aircraft and international operations, a likely response by competitors, and also managing the company's existing international code share and interline relationships, he said.
WestJet announced it would begin operating wide-body aircraft as early as the start of the winter season in the second half of 2015. The company indicated it would expand into other international markets during the following 2016 summer season, although no details were provided.
"We believe it is too early to begin modifying estimates given the scarcity of information, although our bias is that this likely has a negative short term impact on costs in 2014 and 2015, although it could generate new long-term positive growth," Mr. Murray said in a research note.
He expects further information may be released by the company in the next few weeks, including when it reports second-quarter results on July 27.
He maintained an "outperform" rating and 12-month price target of $31 (Canadian). The analyst consensus price target for WestJet Airlines over the next year is $30.77.
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Ivanhoe Mines Ltd. is "effectively priced for disaster," opening up a buying opportunity for investors who don't necessarily fear the worst for the company, CIBC World Markets analyst Leon Esterhuizen said.
Ivanhoe has ownership stakes in a number of large Africa-based projects to develop copper, platinum and zinc mines. As the company continues the transition from developer to producer, the market has assigned the lowest possible rating to Ivanhoe's assets, Mr. Esterhuizen said.
The company certainly faces significant risk – execution risk, commodity price risk, and political risk. But the quality of the company's large, high-grade deposits and the pace of development have been undervalued by investors, the analyst said.
"Ivanhoe's assets are world-class, both in terms of size and quality. Our various site visits to the company's assets over the last years has re-affirmed this view each time. Good progress has been made in the last year to advance these projects."
He reiterated his "sector outperformer" rating and lowered his price target to $4.20 (Canadian) from $4.30 after Ivanhoe's latest equity raising. The analyst consensus price target over the next year is $3.47, according to Thomson Reuters.
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Baytex Energy Corp.'s shares deserve a premium over its mid-cap peers, but the company's outlook is held back somewhat by its rising debt, said Credit Suisse analyst Jason Frew.
Baytex recently acquired assets in the Eagle Ford shale formation in Texas, an example of the company's track record of acquiring high-return inventory, said Mr. Frew.
The deal also materially increased Baytex's debt position, while Credit Suisse forecasts a funding shortfall for the company.
"An expanded inventory from additional horizons within the Eagle Ford as well as successful sale of assets to improve the balance sheet could change our view," Mr. Frew said.
He is reinstating coverage of Baytex with a "neutral" rating and a $48 (Canadian) target price. The analyst consensus price target over the next year is $53.29, according to Thomson Reuters.
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Record auction proceeds in June has Cantor Fitzgerald analyst Peter Prattas projecting that Ritchie Bros Auctioneers will outperform guidance for the current quarter.
"Gross auction proceeds in June 2014 were $564 million, up 7% versus June 2013," says Mr. Prattas. "This is a record month of June and the third best month ever for the company."
The results suggest that Ritchie Bros will outperform second-quarter 2014 consensus estimates and is on pace to achieve the top end of its annual guidance.
Mr. Prattas maintains his "buy" recommendation and $26 (U.S.) target price. The analyst consensus price target over the next year is $23.88, according to Thomson Reuters.
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In other analyst actions:
Barclays raised its price target on Alimentation Couche-Tard to $33 (Canadian) from $30 and maintained an "overweight" rating.
BMO Nesbitt Burns raised its price target on Element Financial to $18.50 (Canadian) from $17 and maintained an "outperform" rating.
BMO Nesbitt Burns initiated coverage on PrairieSky Royalty with an "outperform" rating and $45 (Canadian) price target.
Jennings Capital initiated coverage on Great Prairie Energy Services with a "buy" recommendation and 12-month price target of 75 cents (Canadian).
Jennings Capital initiated coverage on Treasury Metals with a "speculative buy" rating and 12-month price target of 55 cents (Canadian).
Piper Jaffray upgraded Guess to "overweight" from "neutral" and raised its price target to $32 (U.S.) from $25.
UBS upgraded Apartment Investment and Management Co. to "buy" from "neutral" and raised its price target to $36 (U.S.) from $32.
Darcy Keith