Canadian energy firm Bellatrix Exploration Ltd (TSE:BXE) is a high-risk 'buy' in the view of Dundee Capital Markets.
Fourth quarter production of 40,705 barrels of oil equivalent per day (boepd) was a bit ahead of guidance of 40,500 boepd and the market consensus forecast of 40,513 boepd.
Cash flow per share of 15 cents comfortably topped Dundee's forecast of 13 cents, which was a penny above the consensus view.
The target price has been lifted to C$2.50 from C$2.00 on the back of lowest costs projected for the current fiscal year and the next.
German bank Berenberg has initiated coverage of global security and aerospace company Lockheed Martin Corporation (NYSE:LMT) with a 'buy' recommendation.
It values the stock at $250, a 15% premium to its peers, as a result of its strong, visible cash flows and forthcoming earnings-enhancing benefits.
“Firstly, the pension scheme is over 90% funded and, as a consequence, Lockheed is on a 'cash contribution' pension holiday in 2016 and 2017 (versus its historical run rate of c$2bn a year),” Berenberg noted.
“Secondly, as a result of the Cost Accounting Standards (CAS) pension adjustment under US law, Lockheed is effectively 'owed' $9bn for discretionary pension payments by the US government. We anticipate the recovery will generate over $2bn of cash inflows a year across our forecast.
“Finally, the corporation will receive $1.8bn of cash proceeds from Leidos following the completion of the Information Systems & Global Solutions (IS&GS) divestment. We expect this in Q4 2016,” the bank added.
Lockheed's shares currently trade at $218.
Sticking with the aircraft theme, Wedbush reckons head-winds are turning into tail-winds at Cavium Inc (NASDAQ:CAVM), the provider of semi-conductor processors.
CAVM is seeing the return to growth it expected in wireless infrastructure, enterprise, and mobile, the broker said, after it hosted a busy day of investor meetings for the technology company.
The head-winds that negatively affected first quarter guidance, namely Amazon's move to an inventory hub model and Samsung's decision to switch to Fusion M from Octeon, will become tail-winds, particularly in the second half, in Wedbush's view.
“We came away from our meetings with our conviction level high that CAVM will return to Q/Q [quarter-on-quarter] revenue and earnings growth as it benefits from continued share gains in Octeon and Nitrox, and meaningful revenue contributions from ThunderX, LiquidIO II, and Xpliant,” the broker said.
Wedbush's 12-month price target of $74 is based upon a multiple of 29 times its 2017 pro-forma earnings per share (EPS) estimate of $2.55. Cavium currently trades at C$61.55.
Jefferies has, not for the first time, taken a look at bad publicity magnet Chipotle Mexican Grill, Inc (NYSE:CMG), the fast-food chain that has seen its a third of its market value wiped off after a series of food hygiene scares.
It has downgraded the stock to 'under-perform' and taken a bite out of the $390 price target, which drops to $350 on the back of revised earnings estimates.
The broker now expects zero earnings per share in the current quarter, down from previous expectations of $1.08.
“Given weak Feb SSS [same store sales] trends at nearly -29% (excl. Leap Day), in spite of heavy promo efforts, we believe, with help of proprietary consumer survey, the CMG [Chipotle Mexican Grill] turnaround efforts will take much longer than expected and be more costly,” Jefferies said.
Mackie Research has stuck with its 'buy' recommendation for Argonaut Gold Inc (TSE:AR), despite trimming its net asset value per share calculation to C$3.08, which prompted a reduction in the target price to C$3.
The Mexico and Canada-focused gold miner issued results on Wednesday that showed improved fourth quarter core earnings of C$2.2mln versus the previous year's C$1.9mln, despite lower production taking its toll on revenues, which fell to C$32mln from $49mln the year before.
“Cash costs of $708/oz Au produced were better than our $735/oz forecast, leading to adjusted EPS of $0.01/sh and cash flow of $0.05/sh vs. consensus of ($0.01)/sh and $0.04/sh respectively,” Mackie revealed.