Inside the Market's roundup or some of today's key analyst actions
The Street with Tesla Inc.'S (TSLA-Q) settlement with the U.S. Securities and Exchange Commission with a positive reaction on Monday.
On Friday, the SEC announced it was chief executive elon Musk US $ 20-million and forced to settle charges he committed securities fraud in tweets saying he was considering taking the electric-car maker private. Tesla was also fined US $ 20 million
The deal is likely to be positive for its shares, according to Canaccord Genuity analyst Jed Dorsheimer, predicting an improvement in corporate governance and investor focus moving squarely to the electric-car maker's operations.
"We believe Elon Musk and Tesla 's settlement with the SEC is a positive development for TESLA – by installing a new corporate director and independent director. Dorsheimer. "While we are concerned, we still believe it to be more constructive, given what we see are some near-term operational and capital challenges.
"We view production expectations may remain too high given the many recent distractions. A reset, which we believe may be Q3, could allow a more constructive stance in the shares. However, we are prudently remaining on the sidelines. "
Mr. Dorsheimer maintained a "hold" rating for Tesla shares and a target price of US $ 316, which exceeds US $ 290.38, according to Bloomberg data.
RBC Dominion Securities' Joseph Spak ("sector perform," US $ 315 target) called the settlement a "positive outcome" for both. Musk and Tesla as well as its shareholders.
"For shareholders, especially those who are involved because of Musk (which we believe are not insignificant), that CEO is also a positive," said Mr. Spak. "But more broadly, and to put it bluntly, Tesla's maturity is comparable to other public companies. We believe that the CEO and Chairman role, as well as the addition of two more independent directors, are positive direction towards improving corporate governance. We are hopeful that Elon will emerge and there will be greater accountability for statements / claims / targets. A more stable company with sounder governance could also help with the recruitment of additional (or retainment of) senior talent.
"With the drama from # Tesla420 now drawing a close, we'd expect some last week. The focus will now shift back to fundamentals where we think Tesla still needs to prove itself. The immediate attention will probably be on 3Q18 deliveries, earnings and FCF. "
Canaccord Genuity analyst Yuri Lynk sees recently weakness in CanWel Building Materials Group Ltd. (CWX-T) stock as a buying opportunity.
"Company insiders appear to be in the open market or late," he said. "We think CanWel's stock is down in sympathy with recent lumber price weakness, which has, in fairness, caused us to lower our H2 / 2018 and 2019 financial forecasts. Additionally, we calculate CanWel's September 17 high-yield note offering as being 2 cents dilutive to our prior estimates. Nevertheless, we continue to see the dividend payout ratio falling to 90 per cent next year as normal capex following the completion of the lumber pressure plant in Junction City, Oregon. "
With benchmark lumber prices declined by an average of 22 per cent from the previous quarter. Lynk lowered his third-quarter EBITDA projection of CanWel to $ 20-million from $ 26-million with his full-year estimate falling to $ 74.2-million from $ 83.9-million. His 2019 expectation also fell to $ 80.8-million from $ 85.6-million.
His 2018 and 2019 earnings per share now estimated at 43 cents and 47 cents, respectively, from 52 cents and 54 cents.
"Our model assumes that the Junction City, Oregon lumber pressure treating plant, which is currently under construction, starts up by year-end," he said.
Maintaining a "buy" rating for CanWel shares, Mr. Lynk lowered his target to $ 6.50 from $ 7.50. The average on the street is $ 7.43.
"The stock price performance of companies in the building materials sector has been disappointing so far in 2018," he said. "To date, the average rate of return (24.7 per cent), compared to the S & P / TSX index and the S & P 500 index, which has returned 0.0 per cent and 9.0 per cent, respectively We believe higher interest rates and mixed US housing data are undergoing major growth in 2018. Returning (17.8 per cent) year-to -date (including the generous dividend), CanWel shares have managed to outperform the peer group More recently, however, CanWel has seen pressure from declining spruce-pine-fur (SPF) prices, which not all companies in the comp group have exposure to. "
Acumen Capital analyst Trevor Reynolds said he came away from a marketing trip with Black Diamond Group Ltd. (BDI-T) last week more encouraged about the prospects for the workforce accommodation provider.
"Following an extended period where management's focus was debt reduction and repositioning assets, BDI appears to be well situated in an improving market," said Mr. Reynolds. "The company wants to look at deploy $ 20 million or cash flow towards growth in the Modular Space Solutions division which has been strong or late. In addition, management has successfully completed the concept of LodgeLink and is actively scaling the business along with an improved platform. "
Mr. Reynolds said the company is expecting LNG Canada to announce a positive final investment decision (FID) in the coming weeks, which is expected to lead to a quick ramp-up in activity, including a $ 42-million contract.
That led the analyst to raise his fiscal 2018 and 2019 financial expectations. He's now projecting earnings per share of a 13-cent loss, an improvement or 2 cents, while his 2019 estimate is a 4-cent profit, jumping from 12-cent loss.
Reiterating a "buy" rating for its shares. Reynolds raises his target to $ 4.75 from $ 4.20, which sits above the average of $ 4.22.
"We view BDI as well, with all indications pointing to increased activity levels moving forward," he said. "With a more flexible balance sheet, we expect a higher proportion of capital to growth on a go forward basis. We have increased our ability to move forward and move forward. "
Anticipating the loss of market share and lower-than-anticipated earnings in the next year, Barclays analyst Blayne Curtis downgraded Intel Corp. (INTC-Q) to "underweight" from "equalweight" on Monday.
"Intel faces a costly battle ahead to retain share as a competitive threat from AMD heats up, along with near-term slowing or end markets," said Mr. Curtis.
"The market is already giving AMD credit for significant share gains, but Intel is not going to let that share go with you."
Lowering his fiscal 2019 earnings per share projection to US $ 4.21 from US $ 4.30. Curtis dropped his target price to a low US $ 38 from US $ 53. The average is currently US $ 55.50.
Despite lowering his target price for shares Osisko Mining Inc. (OSK-T) Following the closing of a $ 76.4-million financing, Desjardins Securities analyst Raj Ray said he's maintaining his positive outlook on the company, seeing several up-and-coming catalysts that will continue its recent momentum.
"We see strong momentum in the shares with positive infill drilling results to date, the Triple 8 discovery, improved financial flexibility and the strategic investment by Kirkland Lake," he said.
"Earlier this year, the company's focus is on the expansion and expansion of the Windfall deposit. As we highlight in this note, infill drilling to date has been positive. In addition, discovery of the Triple 8 zone has created new excitement in what could be the feeder zone for the Windfall mineralization. Over the next 3-6 months, we see a strong pipeline of catalysts, including a resource update (Lynx) and bulk sample results (Zone 27) in 4Q18, a full resource update and feasibility study results in early 2019, and ongoing exploration and updates from the Triple 8 zone. "
With a "buy" rating (unchanged), he lowered his target price to $ 4 from $ 4.50 based on equity dilution. The average is currently $ 4.05.
"After a lack of enthusiasm 1H18, Osisko's shares seem well positioned for 2H, given the company's new strategic backing, strengthened balance sheets and potential catalysts over the next 3-6 months," he said.
Believing its earnings expectations are "too optimistic," Oppenheimer analyst Brian Bittner downgraded Chipotle Mexican Grill Inc. (CMG-N) to "underperform" from "perform."
"We respect management's marketing, digital and new product strategies, but do not view them as transformative enough," he said.
Mr. Bittner set a target of US $ 400, which falls below the average of US $ 471.56.
In other analyst actions:
TD Securities analyst Menno Hulshof downgraded Husky Energy Inc. (HSE-T) to "hold" from "buy" with a $ 26 target, exceeding the average on the Street of $ 23.35.
Macquarie analyst Brian Bagnell upgraded MEG Energy Corp. (MEG-T) to "outperform" from "neutral" with a $ 12.50 target, jumping from $ 8. The average is $ 11.73.
With files from Reuters and Bloomberg News