Market Overview

3 Energy Stocks Canaccord Is Making Moves In

Share:
Related AUQ
Raymond James Upgrades Alamos Gold On Valuation
Canaccord Upgrades Alamos Gold, Sees 39% Return Possibility
Related CCJ
Wall Street's M&A Chatter From March 6
Watch These 8 Huge Call Purchases In Tuesday Trade

In a report published Thursday, Canaccord Genuity analysts changed their ratings on three Energy sector stocks.

The analysts upgraded their rating on AuRico Gold Inc (NYSE: AUQ) from Hold to Buy, while reducing the price target from C$5 to C$4.75.

AuRico's shares hit a 52-week high on January 13. Since then, the stock has underperformed the S&P/TSX Global Gold Index by 28 percent. The stock has underperformed the S&P/TSX Global Gold Index by 18 percent year-to-date.

The analysts said, "…while we believe the underperformance is partly explained by the reserve write-down/asset impairment charge recorded at El Chanate, we expect the market may have over-reacted in light of El Chanate's contribution to AuRico."

The Young-Davidson mine, AuRico's flagship asset, continues to generate robust results on the underground mine ramp-up. Although a planned maintenance shutdown at Young-Davidson (for mill relining) could impact 1Q15 production, the underground ramp-up continues to be on track.

The analysts expect AuRico's shares to recover "over the next few quarters," with the expected strong performance at Young-Davidson.

The analysts upgraded their rating on Cameco Corporation (NYSE: CCJ) from Hold to Buy, while raising the price target from C$20 to C$23.

In the report, Canaccord Genuity noted, "Uniquely among the key commodity prices we forecast, we did not reduce our uranium price forecasts with our Q2 review, such that the full benefit of our reduced C$/US$ exchange rate forecasts flows through to our Cameco financial forecasts. Given Cameco's pre-priced sales book, we note that financial forecasts are anyway more sensitive to the C$/US$ exchange rate than to spot uranium prices."

"Cameco expects the first CRA case (on the 2003 reassessment) to go to trial in 2016, with a Tax Court decision to follow 6-18 months after the trial is complete. Even if the first Tax Court ruling is against Cameco, it could be 3-4 years before we have such a decision. In the meantime, we believe that Cameco's share price is already discounted for a worst-case outcome," the analysts added.

Canaccord Genuity downgraded their rating on Detour Gold Corporation (NYSE: DGC) from Buy to Hold, while reducing the price target from C$15 to C$13.50.

Detour's shares hit a recent low on November 5, 2014. Since then, the shares have outperformed the S&P/TSX Global Gold Index by 71 percent. The stock has outperformed the S&P/TSX Global Gold Index by 13 percent year-to-date.

"We believe the outperformance is largely justified based on continued progress at Detour Lake, the weakening C$ and a much improved balance sheet following the recently completed equity raise…While we see the potential for the discount to narrow, we anticipate that the bulk of the re-rating will likely occur in H2/15 and into 2016 as mining rates improve materially at Detour Lake, thereby driving up production and lowering cash costs," the analysts wrote.

The downgrade reflects lower assumed gold prices, the anlaysts said, while adding that there could be upside to Detour's shares if gold prices were to rise significantly.

Latest Ratings for AUQ

DateFirmActionFromTo
Jun 2015DesjardinsUpgradesHoldBuy
Apr 2015Canaccord GenuityUpgradesHoldBuy
Apr 2015DesjardinsDowngradesBuyHold

View More Analyst Ratings for AUQ
View the Latest Analyst Ratings

Posted-In: Canaccord GenuityAnalyst Color Upgrades Downgrades Price Target Analyst Ratings

 

Related Articles (CCJ + AUQ)

View Comments and Join the Discussion!