It was another earnings smorgasbord with plenty of analyst reports to parse through. In the search for nuggets, FP highlights five gold stocks, including Barrick Gold Corp. and Equinox Gold Corp., while BMO Capital Markets’ chief investment strategist looks past the trade trash talk with a bullish outlook for the Toronto market. Also look for analysts’ take on S&P/TSX composite superstar Constellation Software Inc. 

Stock of the week: Gildan Activewear Inc.

Gildan Activewear Inc.

(TSX:GIL) sewed up a nice week of gains, rising almost 10 per cent, as analysts gave the nod to the Montreal-based clothing manufacturer’s move to purchase North Carolina-based Hanesbrands Inc.

Vershal Shreedhar, an analyst at National Bank of Canada, said the deal makes strategic sense because it will help Gildan diversify its markets, but cautioned it also entails risks as Hanesbrands’ prospects have been shrinking over the years. Nonetheless, he maintained his price target of $80 for Gildan. The stock is currently trading in the high $70s.

“We believe that Gildan is a solid company; it has many drivers for EPS growth, including revenue growth, improving costs, and share repurchases,” Shreedhar said in a note.

TD Cowen analyst Brian Morrison also likes the deal, saying in a note that the purchase “should position Gildan as a global leader in apparel basics.” He has a buy recommendation on the stock and a price target of $82.63.

Of the analysts covering Gildan, 92 per cent rated the stock a buy, with Morningstar Inc. analyst David Swartz upgrading his price target to the highest amongst the group — to $128.43 from $72 — according to Bloomberg.

Keeping score

Don’t let the trade trash talk get you down

Brian Belski is still bullish on Canadian stocks. “Despite persistent trade rhetoric, we remain steadfast that Canada is well-positioned fundamentally and that investors should remain focused on the broader fundamental normalization process that is well under way in our view,” the chief investment strategist at BMO Capital Markets said in a note on Aug. 12. He pointed to normalizing Canadian earnings, including positive revisions, stabilizing profitability metrics, growth expectations that are likely to hit double digits by year-end and earnings per share estimates that are trending higher. He has a target for the S&P/TSX composite index of 28,500 for the end of the year.

Gold shines bright among TSX gainers

Gold companies and other precious metals miners have consistently ranked in the Top 10 S&P/TSX composite weekly gainers since at least late June. That’s not a surprise given that the price of gold is up 27 per cent year to date, though it’s lately been bouncing around the US$3,300 to US$3,400 an ounce range. Earnings from these companies have been pouring in over the past few weeks, so we thought we would take a quick look at price targets analysts have issued for some names in the sector.

Barrick Gold Corp.

(TSX:ABX): TD Cowen has a $41.35 price target on Barrick, which is currently trading in the low $30s, up just under three per cent from the end of last week. Stephen Green, an analyst at Toronto-Dominion Bank, cited an increase of five cents per share in the dividend and ongoing share buybacks as positives for the stock.

Equinox Gold Corp.

(TSX:EQX): Michael Siperco at RBC Dominion Securities Inc. has a “positive” view of Equinox and a price target of $11, with the stock currently trading around $11.20. He likes Equinox after a California mining project was approved for a fast-track permitting process, with two other projects ramping up this year. Kevin O’Halloran, an analyst at BMO Capital Markets, has a $13 price target on Equinox.

Galiano Gold Inc.

(TSX:GAU): Raj Ray, an analyst at BMO Capital Markets, increased his price target for Galiano to $2.50 from $2. “We will look for two to three quarters of consistent results to get more constructive,” he said in a note. Galiano is trading around $2.70 and is up 27 per cent since releasing its earnings earlier this week.

Artemis Gold Inc.

(TSXV:ARTG): “We expect a positive reaction from (Artemis) shares following a solid Q2,” analysts Wayne Lam and Kulvir Gill at TD Cowen said in a note this week, adding that the company’s results beat consensus on higher gold sales and a higher “realized price.” The pair maintained their price target of $31 after hiking it to that level in July from $24. The stock has posted a strong year to date, climbing about 76 per cent. It’s currently trading around $28.50.

Aya Gold and Silver Inc.

(TSX:AYA) CIBC Capital Markets analyst Cosmos Chiu is expecting a lot from Aya, given he has a price target of $22 on the shares, which are currently trading at a bit more than $12. Second-quarter earnings met expectations and Chiu is looking for a strong second half after company executives maintained guidance on gold production of five to 5.3 million ounces and cash costs.

Reaching for the constellations

Don’t let Constellation Software Inc.’s (TSX:CSU) current share price of $4,308 scare you. Analysts David Kwan and Mahmoud Halloum at TD Cowen think the recent weakness in the shares — they dropped about 11 per cent after reporting earnings on July 8 — provide an opening for investors, calling the stock a “great buying opportunity” and describing it as a “proven high-quality defensive name.” The pair hiked their price target to $5,700 from $5,600, providing a pecking order in the software sphere, with the Toronto-based company first, Topicus.com Inc. (TSX:TOI) second and Lumine Group Inc. (TSX: LMN) third.

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