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A CN train in northern Alberta.

Inside the Market's roundup of some of today's key analyst actions. This file will be updated during the trading day.

Deteriorating revenue and free cash flow at AGF Management Ltd. are raising questions about the company's dividend, Canaccord Genuity analyst Scott Chan said.

On Tuesday, the Toronto-based mutual fund operator and wealth management company reported its second-quarter earnings, which fell short of analyst expectations.

"We question the sustainability of its dividend over the mid-long term, unless growth initiatives materialize and gross sales improve to support assets under management," Mr. Chan said. "We believe a dividend cut would seriously be considered if equity markets declined and AGF receives potentially more notice of reassessments from the Canada Revenue Agency."

He lowered his target price on AGF shares to $10.50 (Canadian) from $11 and reiterated a "sell" rating.

Also today, National Bank Financial downgraded its rating on AGF Management to "sector perform" and cut its price target to $13 (Canadian) from $14.

The analyst consensus price target over the next year is $12.61, according to Thomson Reuters.

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RBC Dominion Securities analyst Neil Downey downgraded Morguard Corp. to "sector perform" from "outperform," citing the stock's recent strong performance. However, he raised his price target to $165 (Canadian) from $150.

Morguard shares have risen 22 per cent year to date, and 45 per cent over the past 12 months. "With strong recent performance, we see less robust near-term return potential in the shares for the first time in many (many) years," said Mr. Downey.

He stressed his rating downgrade was strictly valuation driven, and continues to see Morguard shares "as a good store of value," with growth still expected over the long term in net asset value per share and funds from operations.

The analyst consensus price target is $162.50.

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The "meaningful production and robust economics" of its Brucejack project in northern British Columbia could position Pretium Resources Inc. as a takeover candidate over the next 12 to 18 months, said CIBC World Markets analyst Jeff Killeen.

Pretium released an upgraded feasibility study last week for Brucejack, which incorporated upgraded reserve and capital cost estimates.

"Despite further conservatism in commodity price assumptions and a 12.5 per cent higher capital expenditures, the study indicates Brucejack continues to demonstrate robust economics," noted Mr. Killeen in a research note. Pretium estimates an after-tax internal rate of return from the project of 28.5 per cent, assuming an $1,100 (U.S.) per ounce gold price and $17 per ounce silver price. Mineral reserves for Brucejack now sit at 7.5 million oz.of gold and 30.6 million oz.of silver.

"We believe Brucejack could produce over 300,000 ounces of gold per annum (on average), which would provide meaningful production growth to a range of senior or intermediate producers," Mr. Killeen said.

Several key milestones remain for the project, including receiving full permitting for development. Mr. Killeen believes the company may need to obtain all permits before Brucejack "hits the takeout radar."

He raised his price target on the stock to $11.50 (Canadian) from $9.50 while maintaining a "sector outperformer" rating. The analyst consensus price target is $13.16.

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Coming off another strong earnings season, Canadian banks have room to move on the strength of their capital positions, Bank of Nova Scotia analyst Sumit Malhotra said.

While global banking regulations seem to require ever-higher capital holdings, the Canadian banking sector is generally well-positioned in that regard, Mr. Malhotra said.

"We think there is a case to be made that the sector merits 'capital credit' insofar as valuation is concerned."

Even after accounting for likely levels of share repurchases, the capital position at some of the banks is expected to continue to build.

"The view here is that the banks will eventually move to deploy this excess capital to the earnings-per-share benefit of shareholders in one form or another," Mr. Malhotra said.

He applied the following target price increases based on excess capital:

Bank of Nova Scotia to $78 (Canadian) from $74; Toronto-Dominion Bank to $59 from $57.50; Canadian Imperial Bank of Commerce to $106 from $103; and Royal Bank of Canada to $82 from $81.

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The updated cost projections of the Canadian portion of Enbridge Inc.'s Line 3 Replacement Program (L3R) are not helpful to the company's financials, says CIBC World Markets analyst Paul Lechem.

The project has increased from $4.2-billion to $4.9-billion, while the cost of the U.S. portion remains unchanged at $2.6-billion (U.S.).

"Previously, Enbridge stated that it did not require additional common equity, but it chose to 'de-risk' its funding plan given the uncertain timing of dropdowns/monetizations," says Mr. Lechem. "All told, these announcements are modestly negative to current financials given the higher cost of L3R (only partially recovered in tolls) and lower incentive distributions from EEP (Enbridge Energy Partners)."

Mr. Lechem has reduced his 2014 and 2015 estimates slightly, but his overall outlook is unchanged. He maintains his "sector outperformer" rating and $56 target price. The analyst consensus price target over the next year is $55.38, according to Thomson Reuters.

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In other analyst actions:

Merrill Lynch raised its price targets on several U.S. and Canadian railway stocks by an average of 9 per cent, citing strong earnings growth. The price target for Canadian National Railway rose to $67 (U.S.) from $62; and for Canadian Pacific Railway to $202 (U.S.) from $180.

National Bank Financial raised its price target on Legacy Oil + Gas to $12 (Canadian) from $10 and reiterated an "outperform" rating, while BMO Nesbitt Burns raised its target to $11.50 (Canadian) from $10.50 and maintained an "outperform" rating.

Canaccord Genuity downgraded Crown Point Energy to "hold" from "speculative buy" and cut its price target to 50 cents (Canadian) from $1.50.

Barclays started coverage on Intact Financial with an "overweight" rating and $80 (Canadian) price target.

Credit Suisse hiked its price target on Apple to $96 (U.S.) from $85.71 and maintained a "neutral" rating.

Merrill Lynch downgraded Coach to "underperform" from "neutral" and cut its price target to $31 (U.S.) from $38.

KeyBanc downgraded Harley-Davidson to "hold" from "buy" and removed its $80 (U.S.) price target.

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