Monday’s analyst upgrades and downgrades

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

Disappointing second-quarter results for SNC-Lavalin Group Inc. have been described as a "modest setback" by Desjardins Capital Markets analyst Benoit Poirier, who sees opportunities for growth ahead.

"SNC's 2Q14 results came in below expectations, primarily driven by weaker-than-expected contributions from the Power and Oil & Gas divisions, partly offset by an ongoing decline in SG&A expenses," says Mr. Poirier, in a research note. "SNC reiterated its full-year EPS guidance of C$2.80–3.05; however, on the call, management tempered its longer-term outlook for the Mining & Metallurgy and Power divisions, citing market conditions."

He remains bullish on SNC as it is shortlisted for big-ticket projects and has several catalysts ahead. Mr. Poirier maintains his "Buy–Average Risk" rating and has lowered his target price to $63 (Canadian) from $64.

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Slumping demand for whiteboards is hurting Smart Technologies Inc. as classrooms increasingly embrace technology, says CIBC World Markets analyst Todd Coupland.

Mr. Coupland says that while Smart's first quarter results were in line, its revenue outlook for fiscal 2015 was cut by 20 per cent and its EBITDA forecast was reduced by 45 per cent.

"Declining demand for whiteboards is not yet being offset by its new enterprise products," he says. "Demand for whiteboards is suffering from investments being directed to accelerate classrooms with Wi-Fi. While new

products such as Smart Room Systems, Smart kapp and Smart amp have good potential, it is not enough to offset these declines in F2015."

Mr. Coupland is downgrading Smart Technologies to "sector perform" from "sector outperform" and cutting his target price to $2 (U.S.) from $5.25.

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Alliance Grain Traders Inc. is poised for rising profitability both from its pulse business and its expansion into food products, Canaccord Genuity Keith Carpenter said.

"The legacy business has not only returned to a stable profitability level, we believe it will add to the growth profile of the company through our forecast period," Mr. Carpenter said.

"However, the significant growth that we expect from Alliance Grain Traders will likely come from the build-out of the food ingredient business, a business that we estimate is already providing greater than twice the margin to that of the legacy business."

Canaccord added the stock to its Canadian Focus List and raised its target price to $26 (Canadian) from $23.50 while maintaining a "buy" rating.

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Potential volume declines in the Alliance pipeline, which is partly owned by Veresen Inc., may not be as severe as initially thought, RBC Dominion Securities analyst Robert Kwan said.

With most of the Alliance contracts set to expire at the end of 2015, Veresen has been facing concerns about its ability to sign new deals to transport natural gas.

"Alliance recontracting, while not a good situation, is certainly not shaping up to be a disaster," Mr. Kwan said.

"Despite a proposed material reduction in base tolls, we estimate that it is not out of the realm of possibilities that the revenue decline from recontracting could be minimal."

Meanwhile, the company's Jordan Cove liquefied natural gas plant development in Oregon offers investors upside beyond the Alliance contracts, Mr. Kwan said.

He raised his price target to $21 (Canadian) from $18 and maintained an "outperform" rating on Veresen stock.

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Fortress Paper Ltd. will continue to be hampered by soft pricing for its pulp, CIBC World Markets analyst Mark Kennedy said.

Last week the company posted a bigger loss than expected in the second quarter, largely as a result of excess supply.

"World dissolving pulp markets remain in a state of oversupply and we estimate it will take at least until late 2016 before the outlook begins to improve," Mr. Kennedy said.

In the meantime, the company's cash is expected to decline while its debt increases.

"Liquidity could get tight," Mr. Kennedy said. He lowered his target price on Fortress stock to $1.40 (Canadian) from $3 while maintaining a "sector underperformer" rating.

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In other analyst actions:

BMO has downgraded Semafo Inc. to "market perform" from "outperform".

CIBC World Markets has upgraded Extendicare Inc. to "sector performer" from "sector underperformer".

CIBC World Markets has raised its price target for Keyera Corp. to $90 (Canadian) from $80, maintains "sector outperformer" rating.

BMO has boosted its price target for Canadian Apartment Properties to $25.50 (Canadian), maintains "outperform" rating.

TD Securities has cut its target price for Armtec Infrastructure to $1 (Canadian)from $1.50, maintains "hold" rating

Dundee Capital has cut its target price for Artis REIT to $17 (Canadian)from $17.25, maintains "buy" rating.

Canaccord Genuity has its target price for Autocanada Inc. to $88 (Canadian) from $91, maintains "buy" rating.

CIBC World Markets has cut its price target for Avigilon Corp to $40 (Canadian) from $45, maintains "sector outperformer" rating.

Global Maxfin Capital has initiated coverage of BCE Inc. with a "buy" rating and a target price of $55 (Canadian).

BMO Capital Markets has raised its price target for Brookfield Asset Management to $45 (Canadian) from $42.50, maintains "market perform" rating.