December 11 Price Targets: Cenovus Energy, Enbridge, Emera & More
Good morning,
Yesterday, December 11, eight brokerages set price targets on nine S&P/TSX Composite stocks. Let’s take a look at these new price targets and see how reliable some of these brokerages have been when setting price targets on these stocks.
Raymond James: Cenovus Energy
The price targets set by Raymond James on Cenovus Energy has bounced around in the last 20 months - going from $14 up to $17, and back down to $13 per share. However, the actual share price hasn’t moved much, gaining only 1.56% since April 24, 2018. It’s possible these price targets were set largely on an industry recovery as opposed to strength in the particular company.
BMO Capital Markets: Enbridge
Similar to Cenovus, BMO Capital Markets has consistently set its price targets substantially above the share price at the time, perhaps on a belief of an industry recovery rather than the reason being company-specific. The spread between price and price target has noticeably narrowed though, which appears to indicate lower expectations.
National Bank Financial: WestJet Airlines
On May 13, 2019, Onex acquired WestJet Airlines and today the transaction happened to close, so it is no surprise to see the latest price target matching the $31 offer price. WestJet Airlines will now be operated privately.
UBS Group: Emera
UBS Group doesn’t appear to update its ratings on Emera as frequently as other brokerages, however they have been increasing their price targets along with the most recent share price. It’s worth noting that of the five brokerages who have updated their price targets since September, $65 represents the high end of the range.
Summary
If you’ve been reading my past analysis of price targets, you’re likely picking up a pattern of analyst price targets being overly optimistic and certainly not indicative of what the share price will be one year from now. I suspect looking back, these price targets will be no different. Take them for what they are - estimates and best guesses - and do your own research. With that being said, keep on the lookout for those analysts who consistently outperform their peers. They do exist, it can sometimes just be hard to find them.
Good luck!