While Fools should generally take the opinion of Bay Street with a grain of salt, it’s not a bad idea to take a closer look at particularly stock-shaking upgrades and downgrades — just in case their reasoning behind the call makes sense.
So what: Along with the upgrade, analyst Menno Hulshof reiterated his price target of US$14, representing about 44% worth of upside to yesterday’s close. So while momentum traders might be turned off by the stock’s weakness in recent months, Hulshof’s call suggests growing sentiment on Bay Street that Talisman is becoming too cheap to pass up.
Now what: According to TD, Talisman’s risk/reward tradeoff is particularly attractive at this point. “This is the first time that we have been positive on the name since January 2013,” said Hulshof. “It has become increasingly difficult to ignore the fundamental gap between TLM’s share price and our estimates of underlying value (NAV and sum-of-the-parts or SOTP). In both instances, our calculations suggest that there is significant upside that is not being recognized by the market.”
Of course, with the stock still off more than 25% from its 52-week highs, those concerns might be giving patient Fools a solid long-term growth opportunity.
Renowned Canadian investor Iain Butler just named 10 stocks for Canadians to buy TODAY. So if you’re tired of reading about other people getting rich in the stock market, this might be a good day for you. Because Motley Fool Canada is offering a full 65% off the list price of their top stock-picking service, plus a complete membership fee back guarantee on what you pay for the service. Simply click here to discover how you can take advantage of this.
Fool contributor Brian Pacampara owns no position in any of the companies mentioned. The Motley Fool does not own any of the companies mentioned.