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Analyst expects Qualcomm Inc. to beat estimates

Qualcomm Inc. (QCOM-Q)
Slower smartphone growth is contributing to another "mixed quarter" for the handset industry, suggests BMO Nesbitt Burns analyst Tim Long.

"We believe smartphone growth stalled in the [second] quarter owing to lack of compelling product coupled with a slowing European market," Mr. Long said in a research report.

"Our global model calls for 380 million units (including white box or unbranded phones), up 2 per cent quarter over quarter, and up 1.6 per cent, year over year, which is below normal seasonality," he said. "We are modelling a soft third quarter with units up 3.4 per cent, quarter over quarter, to 393-million phones, as consumers wait for the new iPhone."

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During the latest quarter, the HTC One X did not make an impact, while the Samsung Galaxy SIII launched late, he wrote. "RIM, Nokia and HTC all missed [expectations] badly, but each is in a tough competitive position.

"We are expecting better results from Sony and LG. We believe that Huawei and ZTE continued to take share although they are seemingly more intent to co-operate in the mid-range and high range than in the low end where they have had success."

When Qualcomm Inc. reports second-quarter results on July 18, however, he expects the telecommunications equipment maker to beat consensus estimates.

Upside: Qualcomm is Mr. Long's only outperform-rated handset stock with a one-year target of $77 (U.S.) a share.


North American Palladium Ltd. (PDL-T)
Raymond James analyst Alex Terentiew cut his target on the precious metals producer after it put its Quebec gold mine up for sale, and lowered price forecasts for the platinum group of metals. The miner is still "a growth story with significant exposure to palladium," he said.

Downside: The analyst, who maintains his "outperform" rating, reduced his one-year target to $3.75 (Canadian) a share from $4.50.

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InterRent REIT (IIP.UN-T)
The trust, which has a portfolio of apartment buildings, has started to ramp up its external growth opportunities, said Dundee Securities analyst Brad Cutsey. This week, it acquired a high-rise building in Toronto for $9.3-million.

Upside: He maintains his "buy" rating and a one-year target of $5 a share.


Manitok Energy Inc. (MEI-X)
Manitok is a "less-followed" junior oil and gas company in the western Canada basin that offers investors exploration upside without straying away from home, said TD Securities analyst Juan Jarrah. "Management is fiscally conservative and has shown a 100 per cent drilling success rate to date (seven wells).

Upside: The analyst initiated coverage on Manitok with a "buy" rating and one-year target of $1.90 a share.

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Mako Surgical Corp. (MAKO-Q)
The medical device company lowered sales guidance again this year for its robotic arm technology, and posted weaker-than-expected preliminary second-quarter results, said Canaccord Genuity analyst William Plovanic. Mako is set to provide details of its strategy on Aug. 1

Downside: The analyst, who maintains a "hold" rating, cut his one-year target to $16 (U.S.) a share from $29.

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