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U.S. mortgage insurer Genworth Financial is looking to sell some of its smaller divisions.Moe Doiron/The Globe and Mail

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

CIBC World Markets downgraded Canadian residential mortgage insurer Genworth MI Canada Inc. to "sector performer," citing valuation concerns after the stock's steep ascent this summer amid a still-robust housing market.

"The Canada housing market has held up extremely well in 2013, as expected, and Genworth's valuation multiples now appropriately reflect current market conditions," said CIBC World Markets analyst Paul Holden.

He expects Genworth to continue to generate a lot of capital and return that to shareholders through dividends and share repurchases. But he sees only minimal upside for investors in terms of capital gains.

"We have seen the multiple for Genworth expand from 0.7x a year ago to 0.9x currently. Given our outlook for an ROE of 10-11 per cent and restricted top line growth, we think 0.9x is an appropriate valuation multiple," he said. "Valuation expansion, a significant part of our investment thesis, may be near an end."

Target: He maintained a $30.75 price target.


Dominion Diamond Corp.'s latest quarterly results fell short of BMO Nesbitt Burns's expectations, but the miner is one of analyst Edward Sterck's top diamond picks.

Dominion, which was known as Harry Winston Diamond until selling its retail division in March to Swatch for $750-million, blamed its smaller adjusted profit on lower prices for diamonds from its Ekati mine in Northwest Territories. But Mr. Sterck said Dominion's first quarter of full ownership of the Ekati mine was "reasonably solid," while forecasting a lower 2014 per-share profit of 65 cents (U.S.).

In addition to the Ekati mine, Dominion has a cost-production sharing agreement with Rio Tinto at the Diavik mine in the Northwest Territories and operates sales offices in Belgium and India.

"Despite the noisy Q2 results, the underlying asset value and future earnings potential remains broadly unchanged," Mr. Sterck wrote in a note to clients on Friday.

Target: Mr. Sterck maintains an "outperform" rating with a $20 (Canadian) target price.


Analysts at Canaccord Genuity and BMO Nesbitt Burns Friday raised their price targets on Descartes Systems Group Inc., citing the transportation support company's growth and positive cash flow.

Canaccord's Richard Davis, who rates the Waterloo-Ont.-based company a "buy," said Descartes is coming off another better-than-expected quarter and will continue to increase its profit.

Kevin Manning, a BMO analyst who rates Descartes "market perform," said in a research note the company's purchase in May of KSD Software Norway gives it a broader business base with greater revenues. "We fully expect that Descartes will continue to deliver 10 per cent to 15 per cent annual adjusted EBITDA growth as it has historically," he said.

Canaccord's Mr. Davis expects EBIDTA growth of about 15 per cent a year, and that the shares will post similar gains.

Targets: Mr. Manning raised his share price target to $11.50. Mr. Davis raised his target to $13 from $12.50.


BMO Nesbitt Burns analyst Stephen MacLeod cut his price outlook for shares in retailer North West Co.

The operator of banners that include Giant Tiger is facing stiffer competition and smaller margins in food sales, but some of these pressures will be partly offset by cost cutting and better productivity, wrote Mr. MacLeod, who says the company's near-term outlook is "mixed."

CIBC's Mark Petrie said Giant Tiger "is showing signs of life after closing weak stores," but faces tough rivals in Wal-Mart Stores Inc. and Target Corp.

Target: BMO's Mr. MacLeod rates North West "market perform" and reduced his price target to $24. CIBC's Mr. Petrie maintained a "sector performer" rating with a $24 price target.


Other analyst actions today include:

Raymond James upgraded ADF Group Inc. to "outperform" from "market perform" and raised its price target to $2.75 from $1.50.

Goldman Sachs upgraded ETrade Financial to "buy" from "neutral" and raised its price target to $19 from $13.50.


For more analyst actions, breaking investing news and analysis, follow Darcy Keith on Twitter at @eyeonequities