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Inside the Market’s roundup of some of today’s key analyst actions

Apple Inc. (AAPL-Q) introduced its augmented reality headset this week at the Worldwide Developers Conference following plenty of rumours, marking the company’s first major product launch in about 10 years. The Vision Pro comes with an initial price tag of US$3,500, though, raising questions about the premium-priced headset’s ability to drive significant new profits at Apple.

Daniel Ives, an analyst at Wedbush Securities, expects that the Vision Pro will help Apple boost the appeal of its tech ecosystem to consumers and reward investors with a stronger moat to competitive pressures. Mr. Ives raised his target price on the stock to US$220 from US$205 previously.

Some of this new enthusiasm for the stock comes from an expected upgrade cycle for iPhones: He estimates that some 250 million iPhones have not been upgraded in four years, setting up what could be strong demand for the premium devices.

But the headset introduction – and everything that comes with it – adds an interesting new dimension that he believes is good news for the stock.

“This week while the Vision Pro product cycle launch took the headlines at WWDC we believe the bigger story is around essentially a new app store that will be built around this new form factor with the Apple developer moat a massive advantage in this tech battle for developers,” Mr. Ives said in a note Wednesday.

He said the initial feedback from developers has been positive, and the headset could drive additional services revenue in 2025 as prices for the headset come down and more consumers embrace the technology.

“We continue to strongly believe this is the first step in a broader strategy for Apple to build out a generative AI driven app ecosystem for its golden customer base that will have thousands of use cases across fitness, health, sports/movies via Apple and partner (e.g. Disney) content, and a myriad of other areas just starting to take shape with developers,” Mr. Ives said in his note.

Apple’s share price touched a fresh record high on Monday.


Alimentation Couche-Tard Inc. (ATD-T) continues to expand its network of convenience stores and service stations, with upbeat implications for the company’s share price outlook. Irene Nattel, an analyst at RBC Dominion Securities, raised her target on the stock to $87 from $85, after formally factoring in Couche-Tard’s recent deal, announced in March, to buy more than 2,000 services stations from French oil gian TotalEnergies SE.

She expects that the new additions – the biggest addition to Couche-Tard’s global network of stores in about five years – will drive profits for the parent company in the first year of operations, and benefit from revenue synergies that will add value to the share price.

“In our view, this transaction is the quintessential ATD deal: Strategically compelling, geographically complementary, and an attractive valuation to deliver a financially accretive transaction for shareholders,” Ms. Nattel said in a note.

It also arrives at a time when convenience stores look like wise bets against as economic clouds move in, which is why the analyst recommends the stocks as a best idea for the second half of the year.

“Against the backdrop of elevated rates and growing economic uncertainty, we favour staples/staples-like names that perform across the cycle and that enjoy stock-specific optionality,” she said.

She estimates that Couche-Tard will report earnings per share growth of about 5 to 7 per cent annually from 2025 through 2027.


Walter Spracklin, an analyst at RBC Dominion Securities, released his preview for operational trends for railroads in the second quarter, with weak trends in intermodal offering a sober outlook for the sector.

Though he remains upbeat about Canadian National Railway Co. (CNR-T) and Canadian Pacific Kansas City (formerly Canadian Pacific Railway Ltd.) (CP-T), with “outperform” recommendations for both stocks, he trimmed his target price for CNR to $180 from $184.

“[CNR] Volumes continue to be pressured reflecting soft domestic demand,” Mr. Spracklin said in a note.

He lowered his profit estimate for the second quarter to $1.82 per share from $1.96 previously, which puts him below the average estimate of $1.97 per share from analysts.

Mr. Spracklin also lowered his full-year estimate for CNR to $7.81 per share from $8.15 previously, due to downward adjustments to volume expectations in the second and third quarters. Though profit estimates are falling, he believes the valuation of the stock will remain steady, at 20-times earnings.

For CP, Mr. Spracklin maintained his target price of $122 per share, but lowered his profit estimates dues to decreased volume and weaker margins. He expects CP will generate a profit of 95 cents per share, down from a previous estimate of $1.12 per share.

“However, we point to significant potential variance surrounding near-term integration costs” following CP’s merger earlier this year with Kansas City Southern Railway, Mr. Spracklin said in his note.

He added: “We have a highly positive view on the CP-KCS combination and believe the merits of the deal are extensive. We view the network advantage as the most compelling factor, and also view positively the increased diversification on a business and geographic basis. Finally, we view the $1-billion in announced synergies as conservative, and therefore see upside to consensus expectations.”


Rene Cartier, an analyst at BMO Capital Markets, raised his target price on Osisko Gold Royalties Ltd. (OR-T) to $23 from $22 previously, after the company gained shareholder approval for a silver and copper stream transaction in Australia – with copper playing a key role in the upgrade.

“After a drawn out process, we see positive sentiment for the CSA transaction finally set to close. Moreover, in our view, the terms of the copper stream are more attractive than the silver,” Mr. Cartier said in a note.

He added: “Delivering into production expectations, and mine life extension, will be important value drivers. Given the transaction consideration, counterparty exposure is of moderate size; however, we see opportunities, and catalysts, to enhance portfolio diversification.”

Carey MacRury, an analyst at Canaccord Genuity, maintained a “buy” recommendation and price target of $27.50 on Osisko.


Follow David Berman on Twitter: @dberman_ROBOpens in a new window

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