Today'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.

While the outlook for the oil and gas services sector has deteriorated as a result of the downturn in commodity prices, valuations remain attractive, TD Securities analyst Scott Treadwell said.

Growth in the sector should be limited through 2015, Mr. Treadwell said. But "with many names trading at or below tangible book value or replacement cost, we are maintaining our 'overweight' recommendation for the space."

As a result of the recent stock selloff, he highlighted two names as materially undervalued: Precision Drilling Corp. and Secure Energy Services Inc.

Both stocks have declined by more than 30 per cent from their June peaks.

Mr. Treadwell upgraded Precision Drilling to "action list buy" from "buy" and lowered his price target to $15 (Canadian) from $19. And he upgraded Secure Energy Services to "buy" from "hold," while reducing his target price to $23 from $27.

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The recent selloff in Parex Resources Inc., which declined by about 35 per cent from late July to Wednesday's close, has been disproportionate to the drop in oil prices, Desjardins Securities analyst Justin Anderson said.

"Parex is an extremely healthy company with best-in-class management, no debt and an increasingly sustainable business model," Mr. Anderson said.

While the company certainly faces downside from dropping commodity prices, "we still emphasize that Parex Resources is our favourite name in the international space," he said.

He reiterated his "top pick" rating on Parex stock and maintained an $18 (Canadian) price target. The analyst consensus price target for Parex Resources over the next year is $15.55, according to Thomson Reuters data.

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Canada's ferociously competitive airline sector will benefit from the sudden drop in fuel prices, especially Air Canada, which has the highest costs, said Raymond James Ben Cherniavsky

"We maintain the fundamental view that the competitive dynamics of Canada's airline sector resemble more of a 'zero-sum' battle for market share than a 'comfy duopoly' in which all players magnanimously share in the collective spoils," says Mr. Cherniavsky. "There is no other way, in our view, to explain the relatively aggressive capacity growth in the domestic market or the proliferation of each carrier's brand into different market segments (WestJet into Plus and Encore and Air Canada into Rouge)."

And while he expects the carrier with the lower cost - WestJet - to make long-term gains largely at the expense of Air Canada, the recent dramatic drop in fuel prices provides significant cost relief that should benefit everyone in the industry.

These lower costs – along with recent share price weakness (down 30 per cent over the last three months vs. 12 per cent for the XAL airline index) have convinced Mr. Cherniavsky to upgrade Air Canada from to "market perform" from "underperform" and maintain his $7.50 (Canadian) price target. The analyst consensus price target is $12.32, according to Thomson Reuters.

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OraSure Technologies Inc. is in the process of developing an oral test for the Ebola virus, supporting the company's stock as a top pick in Canaccord Genuity's coverage universe, analyst Mark Massaro said.

"OraSure has confirmed it has engaged in talks with private sector entities and federal agencies and have been working to develop an Ebola test for about three weeks," Mr. Massaro said.

The Pennsylvania-based company already has on the market rapid test kits for HIV and Hepatitis C.

"We believe it is likely that the U.S. Food and Drug Administration would grant Emergency Use Authorization to expedite the review process for any test developed deemed to have immediate clinical necessity, particularly for a rapid, easy-to-use saliva test," Mr. Massaro said.

He raised his price target on the stock to $12 (U.S.) from $11 while reiterating a "buy" recommendation. The analyst consensus price target over the next year is $9.71.

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A "very appealing buying opportunity" has emerged at Westshore Terminals Investment Corp. after the recent market-related selloff, says RBC Dominion Securities analyst Walter Spracklin.

Westshore is the operator of B.C.'s largest coal storage and loading terminal.

"Volumes remains strong, loading rates are set to ramp further, free cash flow generation is significant and expected to increase again in 2018," Mr. Spacklin said in a research note. "Key is that WTE continues to exhibit strong throughputs, which are supported by minimum volume commitments in the event of a more pronounced downturn."

He also believes Westshore could be a potential takeover candidate.

He upgraded Westshore Terminals to "outperform" from "sector perform" and maintained his price target at $36 (Canadian). BMO Nesbitt Burns also upgraded its rating today to "market perform" and reiterated a $30 (Canadian) price target.

The analyst consensus price target for over the next year is $33.88.

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In other analyst actions:

Macquarie downgraded Lululemon Athletica to "underperform" from "neutral" with a price target of $34 (U.S.).

Cantor Fitzgerald upgraded Cameco to "buy" from "hold" with a price target of $26.25 (Canadian).

Cantor Fitzgerald upgraded Uranium Participation to "buy" from "hold" with a price target of $6.15 (Canadian).

Credit Suisse upgraded Bankers Petroleum to "outperform" from "neutral" and cut its price target to $7 (Canadian) from $7.50.

Desjardins Securities downgraded Teck Resources to "hold" from "buy" with a price target of $24 (Canadian).

Desjardins Securities downgraded Alderon Iron Ore to "buy" from "top pick" with a price target of $2.50 (Canadian).

Piper Jaffray cut its price target on Netflix to $345 (U.S.) from $434 while maintaining a "neutral" rating. Jefferies upgraded Netflix to "hold" from "underperform" but cut its price target to $300 from $350. BMO dropped its price target to $375 from $400 and maintained a "market perform" rating.

RBC Dominion Securities downgraded EBay to "sector perform" from "outperform" and cut its price target to $55 (U.S.) from $62.

Merrill Lynch upgraded Time Warner to "buy" from "neutral" and raised its price target to $85 (U.S.) from $79.

FBR Capital Markets upgraded Bank of America to "outperform" from "market perform" with a price target of $20 (U.S.).

Credit Suisse upgraded CSX Corp. to "outperform" from "neutral" and raised its price target to $38 (U.S.) from $33. It downgraded Norfolk Southern to "neutral" from "outperform" and cut its price target to $115 (U.S.) from $122.

JPMorgan upgraded American Express to "neutral" from "underweight" with a price target of $90 (U.S.).

Guggenheim Securities downgraded Walt Disney to "neutral" from "buy" with a price target of $87 (U.S.).

Macquarie upgraded Tiffany & Co to "outperform" from "neutral" with a price target of $115 (U.S.).