TD upgrade
Analyst at TD bank upgraded chr to a BUY today. He has a one year target of $4.50.
On the flip side, Canaccord has a target of $2. This is a bit hard to understand. I get that he thinks AC will pressure them to reduce costs, and pass it on through a new CPA. But he forecasts about $1 a share of free cash flow every year to 2018. Does he not know how to do a discounted cash flow model? How much would you have to cut the cash flow to get a value of only $2 a share? And why would chr agree to that? Just discount the cash flow under the current CPA, and assume the company winds up in 2021, and you still get a value of more than $2 a share. For what its worth, I have a model that assumes a 20% cut in cash flow in 2016 (new benchmarking) and then a further 50% cut in 2021 on a new CPA, discount it all back (like an analyst is suppposed to) and I get a value today of $5.