TD & RBC lower price targets...if you believe in targets ?For the patient long term value investor, this could ? be a very good entry point ? The press release continues regarding the annual expectations:
"The year 2016 will mark the sixteenth consecutive year of sales and net income growth for Stella-Jones. For the fiscal year ended December 31, 2016, consolidated sales are expected to show a year-over-year increase of nearly 18.0%, reaching close to $1.84 billion, while operating income should be between $232.0 and $234.0 million, up from $220.1 million last year."
"The year-over-year decrease in sales and profitability in the fourth quarter of 2016 was primarily driven by lower railway tie demand at the end of the year, as anticipated in management's discussion and analysis for the third quarter of 2016. For the current fiscal year, total sales and operating margins are expected to remain comparable to 2016, assuming stable currencies."
In the TD Action News, TD reports that "Although we continue to like SJ's positioning and long-term potential, we remain very cautious around the near- to medium-term outlook, particularly for Railway Ties. We maintain our HOLD recommendation." TD has lowered their price target from $50 to $43 on this news.
RBC Capital Markets has also lowered their price target from $50 to $42. Eight analysts cover the stock and I am sure we will receive more price target drops and maybe even some downgrades, though