A downgrade for Kinross; further dividend hikes seen at BCEAdd to ...

These are some of the key analyst actions on Bay Street today.

Canaccord Genuity analyst Steven Butler is turning decidedly less bullish on Kinross Gold Corp., which reported weaker-than-expected earnings Wednesday evening amid the dramatic overhaul of its executive ranks.

Of key concern to Mr. Butler is Kinross’s disclosure in the earnings report that it is now considering a smaller, 30,000-tonne-per-day mill at the Tasiast project in Mauritania. It had initially been planned at 60,000 tonnes per day, and the market is bracing for a possible second writedown of the troubled gold deposit Kinross acquired through the $7.1-billion (U.S.) takeover of Red Back Mining two years ago.

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Supplied photo of newly appointed Kinross chief executive Paul Rollinson. Kinross

Management

Video: Management moves at Kinross Gold

Mining

Video: Kinross stock falls on mine writedown

Mining

The outlook for Kinross

A feasibility study of Tasiast has been delayed and Kinross now plans to complete a pre-feasbility study in the first quarter of next year that will incorporate the possibility of a smaller mill.

Kinross reported adjusted second-quarter earnings per share of 14 cents, which was below the consensus estimate of 17 cents. J. Paul Rollinson took over the role of CEO last week after the miner sacked former top executive Tye Burt. The company announced a further management shuffle today.

Downside: Mr. Butler downgraded Kinross to a “hold” from a “buy” and cut his price target to $8.75 (U.S.) from $10.50. That’s below the Street median target of $11.83 (U.S.), according to Thomson/First Call. There are eight strong buy ratings on Kinross, one buy and eight holds, according to Zacks Investment Research.

Also see: Kinross management shuffle continues

Kinross drills into costs as metals prices slip

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BCE Inc.
Investors should expect further dividend increases at BCE thanks to its strong operating results and strategy, said Desjardins Securities Inc. analyst Maher Yaghi. The company beat second-quarter earnings expectations this week as it hiked its annual dividend to $2.27, and Mr. Yaghi sees a sustainable dividend growth rate of 5 per cent per year going forward. “Moreover, while we acknowledge that valuations have increased over the past year, we highlight that these increases are justified by a lower cost of capital driven by a persistent lower interest rate environment,” he said.

Upside: Mr. Yaghi raised his target to $47 (Canadian) from $43.20 and reiterated a “buy” rating.

Related: BCE not ready to hang up on home phone business

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5N Plus Inc.
5N Plus is contending with a landslide in minor metals prices, reporting second-quarter revenues this week that came up well short of expectations as it took impairment charges, noted CIBC World Markets analyst Ian Tharp. The company’s sales backlog has declined, but Mr. Tharp believes that’s mostly due to pricing declines rather than shrinking volumes, and sees product demand remaining intact in the near term.

Upside: Mr. Tharp cut his price target to $3.25 from $5.75 and reiterated a “sector outperformer” rating.