Skip to main content

File photo of Don Walker, CEO Magna International Inc.The Globe and Mail

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

The sell-off following Magna International Inc.'s reduction to 2015 sales guidance provides a buying opportunity, says Canaccord Genuity.

The auto parts manufacturer now sees full-year sales suffering a slight dip year-over-year, based on the midpoint of the range provided by management.

"We believe investors should benefit from good earnings per share growth over the next three years (14 per cent annual growth forecasted) driven by modest sales growth, moderate margin expansion and significant share buy backs," said analyst David Tyerman. "We also expect commensurate or better dividend growth over that timeframe."

Though the outlook for this year is less bright, he notes that the company's guidance for 2017 implies that sales growth should ramp up in the following two years. The analyst warned, however, that the shares could be "range-bound for some time."

Mr. Tyerman upgraded the stock to "buy" from "hold" and raised his price target to $111 (U.S.) from $110.


Gluskin Sheff + Associates' solid performance has not been reflected in its share price, according to Canaccord Genuity.

The money manager said that its assets under management grew by 1.9 per cent quarter-over-quarter in the final three months of 2014, and that net sales bounced back after a poor third quarter.

"At current levels, we believe investors receive GS's performance fee business for free," said analyst Scott Chan. "We believe the market will look positively on the sharp reversal in net sales."

He raised his estimates for earnings per share in 2015 to $1.76 from $1.54.

The analyst also thinks a special dividend of 50 cents to 60 cents per share could be in the offing.

Mr. Chan upgraded the stock to "buy" from "hold" and left his price target at $33 (Canadian).


Amica Mature Lifestyles Inc., long a laggard stock over high debt levels and concerns about an oversupply of seniors' residences, is due for a rally, CIBC World Markets analyst Brad Sturges said.

On Wednesday, Amica reported its fiscal second quarter results, which were slightly ahead of CIBC'S expectations.

Amica "benefitted from improvements year-over-year in mature same-community and lease-up property rental income and lower interest costs driven by the refinancing of maturing debt at lower average interest rates," Mr. Sturges said.

He upgraded Amica's stock to "sector outperform" from "sector perform" and slightly lowered his target price to $7.50 (Canadian) from $7.75.


CSX Corp. reported fourth-quarter results largely in line with Credit Suisse's estimates, but its guidance for 2015 is strong.

"The company reiterated its expectation for double-digit EPS growth in 2015, which assumes GDP-plus volume growth in its Merchandise and Intermodal segments, inflation-plus pricing gains, and about $200-million in productivity savings," said analyst Allison Landry. "Management sees the potential for 'much stronger pricing in fiscal year 2015' compared with fiscal year 2014."

The company indicated that it does not foresee its crude-by-rail business taking a bit hit despite the drop-off in oil prices, but projected that its coal shipments would fall by 23 per cent year-over-year.

Ms. Landry lowered her 2015 earnings per share estimate to $2.19 from $2.26, calling for reduced volume growth and less improvement in its operating ratio in the year ahead than previously thought.

The analyst trimmed her target price to $38 (U.S.) from $39 and kept an "outperform" rating on the stock.


Like so many oil patch stocks, Freehold Royalties Ltd.'s share price is captive to commodity fluctuations, making the immediate future for the stock cloudy, said BMO Nesbitt Burns analyst Gordon Tait.

On Wednesday, Freehold announced a 35-per-cent cut to its dividend and reductions to its 2015 capital budget.

"We believe the weak commodity price environment has created a situation in which Freehold is expected to encounter funding constraints that were originally unanticipated," Mr. Tait said. "We think it is prudent for Freehold to cut its spending and preserve capital to maintain a healthy balance sheet."

But until the price of oil rebounds, the stock is likely to be range-bound, he said.

He lowered his target price on the stock to $22 (Canadian) from $23, and maintained a "market perform" rating.

In other analyst actions

TD Securities downgraded Magna International Inc.  to "hold" from "buy" with a target price of $110 (U.S.).

TD Securities downgraded Cogeco Cable to "reduce" from "hold" with a price target of $72 (Canadian).

TD Securities downgraded Cogeco Inc. to "hold" from "buy" with a price target of $74 (Canadian).

Paradigm Capital rated Diamond Estates Wines & Spirits Ltd. a new "buy" with a target price of 24 cents (Canadian) per share.

JPMorgan raised Corning Inc. to "overweight" from "neutral" with a target price of $26 (U.S.) per share.

Evercore ISI raised Groupon Inc.  to "hold" from "sell" with a target price of $8 (U.S.) per share.

Cowen rated GrubHub Inc.  new "outperform" with a target price of $50 (U.S.) per share.

MLV & Co. downgraded Host Hotels & Resorts Inc.  to "hold" from "buy" with a target price of $26 (U.S.)per share.

Oppenheimer raised SAP SE to "outperform" from "market perform" with an 18-month target price of $80 (U.S.) per share.

Evercore ISI raised Yelp Inc. to "hold" from "sell" with a target price of $60 (U.S.) per share.

With files from Bloomberg