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ATS Automation assembly plant (Handout)
ATS Automation assembly plant (Handout)

Eye on Equities

ATS Automation target price trimmed back Add to ...

TD Securities analyst Robert Palmer chopped his target price on ATS Automation Tooling Systems Inc. after the company failed to find a buyer for its French solar-energy unit.

The maker of machinery and equipment for the industrial and automotive markets has been trying to shed its Photowatt France subsidiary, which has been affected by lower subsidies for solar power in France and Germany. Cambridge, Ont.-based ATS is now reconsidering a broader set of strategic options for both its French and Ontario solar businesses.

Management anticipates a “modest delay” to its 2011 deadline to remove solar from its core business, Mr. Palmer said. “A delay in the separation process is clearly disappointing, but not totally surprising.”

Downside: He is maintaining a “buy” on ATS, but reduced his one-year target by $1 to $8.00 a share.

FirstService Corp. (FSV-TSX)

FirstService Corp. is executing on its growth strategy, but the economic uncertainty appears to have increased in the third quarter and slowed commercial real estate transactions, said CIBC World Markets analyst Ian Parkinson. He has adjusted his estimates for lower growth expectations.

Downside: He has cut his one-year target by $5 to $39.50 a share, but maintains a “sector outperformer” rating.

Wajax Industries Ltd. (WJX-TSX)

The industrial equipment maker will continue to benefit from strong growth across all of its business segments, said BMO Capital Markets analyst Bert Powell. “We look for a continuation of the strong results experienced in the first half of 2011 to continue through 2012.”

Upside: Mr. Powell upgraded Wajax to “outperform” due to valuation, but is keeping his one-year target of $43 a share.

Caterpillar Inc. (CAT-NYSE)

Construction and mining equipment maker Caterpillar Inc. posted higher-than-expected third-quarter profit and sales. “We believe that short of a major global economic setback, we are still at the relatively early stages of the equipment up-cycle,” said Raymond James analyst Theoni Pilarinos.

Upside: The analyst has an “outperform” rating on Caterpillar, but raised his one-year target by $10 (U.S.) to $126 a share.

SXC Health Solutions Corp. (SXCI-Nasdaq)

Health Spring, the largest client of SXC Health Solutions , has been acquired by Cigna Corp. The acquisition puts an estimated 42 per cent of SXC’s revenues at risk that could potentially reverse the company’s market-leading growth profile, said TD Securities analyst Simon Mitchell.

Downside: He cut his one-year target on SXC by $7 (U.S.) to $60 a share, but maintains his “buy” rating.

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