The Globe and Mail reports in its Thursday edition that Canaccord Genuity analyst Derek Dley has boosted his rating on Rona to "hold" from "sell." The Globe's Jody White and Luke Kawa write in the Eye On Equities column that Mr. Dley also elevated his share price target to $13 from $12. Mr. Dley was impressed with Rona's strong same-store sales growth in the fourth quarter.
Rona posted earnings per share ahead of expectations, buoyed by same-store retail sales growth of 6 per cent.
The analyst says: "We note that following four years of same-store sales declines, Rona reported its second consecutive quarter of positive same-store sales growth. ... However, we remain concerned that the macro environment continues to offer headwinds to the home renovation spending market."
Mr. Dley notes slower growth in Western Canada due to sinking oil prices will adversely affect the company, which generates 30 per cent of its revenues from the region.
Meantime, Desjardins Securities analyst Keith Howlett maintained a "buy" rating and increased his price target to $16 from $15. The analyst consensus price target is $13.94.
Mr. Howlett said "buy" Rona in the Eye column on Nov. 13, 2014. The shares were then worth $14.49.
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