Skip to main content

An overall view of the Barrick Gold annual general meeting in Toronto, April 30, 2014.Reuters

Inside the Market's roundup of some of today's key analyst actions. This file will be updated during the trading day.

Deutsche Bank analyst Jorge Beristain downgraded Barrick Gold Corp. to "hold" from "buy" and slashed his price target to $16 (U.S.) from $22, citing concerns that steepening losses in the gold price may hinder the company's ability to pay down its debt.

He is also worried about a deteriorating outlook for its copper business, which he said could result in further writedowns.

"Despite an operationally solid third quarter, we (again) are increasingly concerned on Barrick's ability to deleverage its balance sheet given headwinds facing the gold price, dimming prospects for its copper business and lack of strategic action on partnerships," Mr. Beristain said in a research note, via SteetInsider.com.

"We have removed from our model contributions for Pascua-Lama, a key gold growth project which we had anticipated would attract a strategic partner to help shoulder remaining capex toward a projected first quarter 2018 production start-up. Recent news of proposed higher royalties in Zambia will stretch its Lumwana copper mine and could result in further writedowns," he said.

The analyst consensus price target over the next year is $18.21 (U.S.), according to Thomson Reuters data.

========

Goldman Sachs downgraded Yamana Gold Inc. to "neutral" from "buy" and cut its price target to $6.25 (U.S.) from $10.50, concerned with the miner's poor operational performance over the past few quarters. Goldman also removed Yamana from its "Americas Buy List" - its top picks for investors.

"Our original thesis that the investors would be rewarded for its imminent growth has not played out," conceded analyst Andrew Quail.

Goldman added the company to its Americas Buy List in September of 2013. It turned out not to be a good call. Since then, shares fell 59 per cent, underperforming the Market Vectors Gold Miners ETF by 26 per cent. The company experienced executional issues with three development projects in Brazil and its debt levels went up.

"While we acknowledge that we are downgrading at an attractive valuation (i.e. shares are trading at 15x FY15E P/E, 25 per cent below the senior gold average), we believe it will take time to rebuild investor confidence and we do not see any major catalysts in the intermediate term to change sentiment," Mr. Quail said in a research note, via StreetInsider.com.

The analyst consensus price target for Yamana Gold Inc over the next year is $8.49 (U.S.).

=======

Having benefited from a shift toward "over-the-top" (OTT) programming, DHX Media Ltd.'s shares have become overvalued, National Bank Financial analyst Adam Shine said.

The Halifax-based production and distribution company's stock has risen by almost 30 per cent over the last two months, making the company more richly valued than even Netflix, Mr. Shine said.

"The emergence of OTT players and their appetite for programming has returned content to being king and helped valuations of companies [like DHX]," he said. "DHX is trading at an average premium of 330 basis points to its peers, which is hard to justify."

He downgraded the stock to "underperform" from "sector perform" and maintained an $8.50 (Canadian) target price. The analyst consensus price target over the next year is $9.05.

=======

With a clean balance sheet and free cash flow expected to increase, Canfor Pulp Products Inc. is well positioned to outperform its peers over the next year, CIBC World Markets analyst Mark Kennedy said.

"Canfor may look at other NBSK (Northern bleached softwood kraft) acquisition opportunities if the right deal presents itself. Otherwise we can expect cash reserves to grow," he said.

He upgraded Canfor's stock to "sector outperformer" from "sector performer" and raised his target price to $17.50 (Canadian) from $15.

"Small-cap investors with a value bent should take a look at this name," Mr. Kennedy said.

The analyst consensus price target over the next year is $14.75.

=======

Continued operating improvements at TransForce Inc. have resulted in a price target hike from Canaccord Genuity analyst David Tyerman.

Mr. Tyerman says investors can expect to see share price appreciation from the operating gains.

"We continue to recommend buying TransForce, as we expect good investor returns from operating improvements," he says. "We expect these improvements to translate into substantial EPS growth, mainly from 1) increased margins, and 2) valuation multiple expansion."

Mr. Tyerman maintains his "buy" recommendation and boosted his target price by a dollar to $32 (Canadian). The analyst consensus price target is $31.40.

=======

In other analyst actions:

Canaccord Genuity added Bankers Petroleum to its "focus list" - its favourite investing ideas - while reiterating a "buy" rating and $8 (Canadian) price target.

BMO Nesbitt Burns upgraded Imperial Oil to "market perform" from "underperform" and hiked its price target to $58 (Canadian) from $57.

Raymond James cut its price target on Avigilon to $22 (Canadian) from $29 but maintained an "outperform" rating.

BMO Nesbitt Burns initiated coverage on Slate Retail REIT with an "outperform" rating and $12 (Canadian) price target.

Canaccord Genuity cut its price target on Baytex Energy to $42 (Canadian) from $49 and maintained a "buy" rating.

Cormark Securities downgraded Terango Gold to "buy" from "top pick" with a price target of $1.20 (Canadian).

Beacon Securities downgraded Clearwater Seafoods to "hold" from "buy" and raised its price target to $11.50 (Canadian) from $10.50.

AltaCorp Capital Research downgraded Akita Drilling to "sector perform" from "outperform" and cut its price target to $14.50 (Canadian) from $16.50.

CIBC World Markets cut its price target on Lightstream Resources to $4 (Canadian) from $7 and maintained a "sector performer" rating.

CIBC World Markets upgraded Duluth Metals to "sector perform" from "sector underperform" with a price target of 45 cents (Canadian).

Mackie Research Capital upgraded Newmont Mining to "hold" from "sell" with a price target of $21 (U.S.).

Raymond James downgraded Home Depot to "market perform" from "outperform" and removed its previous price target of $96 (U.S.).

Morgan Stanley initiated coverage on Google with an "equal weight" rating and $600 (U.S.) price target.

Morgan Stanley initiated coverage on Twitter with an "equal weight" rating and $42 (U.S.) price target.

RBC Dominion Securities upgraded Teva Pharmaceutical Industries to "outperform" from "sector perform" with a price target of $68 (U.S.).

Credit Suisse downgraded National Oilwell Varco to "neutral" from "outperform" and cut its price target to $77 (U.S.) from $95.

CIBC World Markets upgraded Mercer International to "sector performer" from "sector underperformer" and raised its price target to $13 (U.S.) from $8.50.