Upgrade looks like there was an upgrade by CIBC
Globe says Manitoba Tel hiked to "sector outperformer"
2015-04-16 06:44 ET - In the News
The Globe and Mail reports in its Thursday edition that CIBC analyst Robert Bek has upgraded Manitoba Telecom Services ($25.23) to "sector outperformer" from "sector performer" and boosted the price target to $28 from $27.
The Globe's Luke Kawa and David Leeder write in the Eye On Equities column that the company's pension shortfall has become an anchor on the stock, which is down more than 12 per cent year to date. Falling bond yields would usually aid a stock with a solid dividend yield, however, in this case, it has seemingly exacerbated the company's pension woes. Mr. Bek says, "Come May 7, when a refreshed strategy is set to be announced, we believe the most likely course of action will be a [dividend] cut of 40 per cent, given other options (capex cut, letters of credit, use of balance sheet) are not viable."
The analyst says the sale of Manitoba Telecom's Allstream business would be an "ideal outcome." Mr. Bek says, however, an Allstream sale does not look imminent. Borrowing from Warren Buffett, Mr. Bek advises investors to "be greedy when others are fearful."