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The Dollarama discount store near Bloor St. West and Bathurst St. in Toronto.Fred Lum/The Globe and Mail

Inside the Market's roundup of some of today's key analyst actions. This file will be updated often during the trading day so check back for new details.

Freehold Royalties Ltd. (FRU-T) currently sits in a "favourable position amid current industry trends," according to BMO Nesbitt Burns analyst Gordon Tait.

Accordingly, he upgraded his rating for the stock to "outperform" from "market perform."

Based on the low-cost and high-margin structure of its royalty properties, Mr. Tait noted Freehold normally trades at a premium to its industry peers. He said approximately 75 per cent of its production volume comes from royalty lands, which do not have associated operating or capital development costs.

"FRU's cost profile has shown a moderate downward trend due to management's cost-containment initiatives," he said. "Freehold has a geographically diverse asset base, which reduces its overall exposure to specific operational risks. We are upgrading FRU for the following reasons: i) management remains focused on maintaining a healthy balance sheet and a reasonable payout ratio, ii) we think Freehold's valuation is compelling given its royalty-dominated revenue stream, and iii) we believe Freehold is well positioned to participate in accretive royalty acquisitions and in structuring GORR (gross overriding royalty) streams with other industry partners."

While bumping up his rating, Mr. Tait did lower his price target for shares of Freehold to $16 (Canadian) from $18 "due to weak commodity price fundamentals." The analyst consensus price target is $17.08, according to Thomson Reuters.

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In the wake of "exceptional" second-quarter 2016 results, Desjardins Securities analyst Keith Howlett called Dollarama Inc. (DOL-T) "a well-oiled machine with great handling."

Saying the company's growth rate for both sales and earnings continues to surpass his high expectations, Mr. Howlett upgraded the discount retail company to "buy" from "hold."

Dollarama reported quarterly earnings per share of 74 cents, "well ahead" of Mr. Howlett's 62-cent projection and an increase of 45.1 per cent from the 51-cent result of a year ago. The analyst pointed to a gross margin rate of 38.4 per cent, up 2.28 per cent, as the primary factor in this earnings beat.

"Management characterized this as a transitory expansion in gross margin, as its merchandise buyers were proactive in managing product category gross margins in front of currency hedges (US dollar) rolling over at higher rates in future quarters," said Mr. Howlett. "This reflects how adroitly managed Dollarama is, as well as the considerable flexibility the company has to fine-tune its assortments while offering compelling value to consumers."

Same-store sales increased by 7.9 per cent with transaction size rising 6.2 per cent and transaction count up 1.5 per cent.

"Dollarama has successfully transitioned consumers to its multi-price-point offering from a single-price-point dollar store environment," he said. "Items priced above $1 (Canadian) in stores represented 76.5 per cent of sales …. Consumers appear to have accepted higher price points as long as products are good value relative to what is available elsewhere in the market."

He added: "It appears probable that management will introduce $3.50 and $4.00 price points in [the second half of the 2017 fiscal year]. This will further differentiate the customer proposition from that of Dollar Tree in Canada, which promotes itself as a single-price-point store ($1.25 per item)."

Mr. Howlett increased his 2016 and 2017 EPS estimates to $2.88 and $3.32 from $2.67 and $3.15, respectively. He also raised his price target for the stock to $93 (Canadian) from $76. The average analyst target price, according to Bloomberg is $87.73.

"After management maintained its guidance upon the release of [first-quarter 2016] results, we reduced our rating to Hold from Buy," he said. "We were much too early. Given how well-managed the company is, we consider it increasingly likely that new growth avenues will be established before the Canadian market reaches maturity."

Elsewhere, TD Securities analyst Brian Morrison downgraded his rating for the stock to "hold" from "buy" while raising his target price to $93 from $87.

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CIBC World Markets analyst Jon Morrison upgraded his rating for Black Diamond Group Ltd. (BDI-T) after it announced that it has been awarded contracts with two customers for a previously underutilized workforce accommodation camp in Lac La Biche region of Alberta.

Mr. Morrison moved his rating to "sector performer" from "sector underperformer" and raised his financial estimates for the company based on the contracts, which carry a seven-month base terms and are expected to generate $13.4-million in revenue.

"Overall, we view the contract awards positively in that they highlight producers' continued desire to move forward with ongoing development plans in the oil sands and point to Black Diamond's ability to sign new contracts and improve revenue visibility with the company's incumbent client base despite challenging market conditions," he said. "In addition, given that the greatest financial returns will be generated through re-contracting already installed and operating camps, we view this as a positive alternative to having to dismantle and re-market the camp in another region."

His earnings before interest, taxes, depreciation and amortization estimates for 2015 and 2016 moved to $100.5-million and $93.5-million from $99.8-million and $92.1-million.

He maintained his price target for the stock at $11.50. Consensus is $15.67.

"Since the end of June, Black Diamond's share price has declined by nearly 50 per cent which compares to the 22-per-cent pullback in the TSX Oilfield Services Index," said Mr. Morrison. "With the company's shares now trading [less than] 6.0x 2015 estimated [enterprise value]/EBITDA and in line with book value, we believe the underperformance is behind the company."

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The software market "underappreciates" the ability of Zendesk Inc (ZEN-N) to maintain "robust" revenue growth, said Credit Suisse analyst Philip Winslow.

He upgraded his rating for the company to "outperform" from "neutral."

"We believe that upgrade and expansion cycles are well underway in each sub-segment of [customer relationship management] applications," he said. "In our opinion, Zendesk is well positioned to monetize the growing need among underserviced small- and medium-sized businesses [server message block] for modern, multichannel customer service technologies, and given the many unique advantages of the company's modern cloud-based application architecture, we expect Zendesk to continue to gain market share in customer service."

He added: "Although Zendesk is already a leader in SMB customer service, we also expect the company's recent success in moving upstream to continue. We believe that the recent enhancements to Zendesk's Customer Engagement platform including Embeddables, Live Chat, and Insights are significant and will attract larger enterprise customers due to their ease of use, omni-channel capabilities, and advanced analytics. Additionally, given that Zendesk offers separate, scaled pricing structures for both the Customer Engagement platform and Live Chat services, not only is the company adding more accounts with higher seat counts but is also doing so at higher price points with limited incremental cost."

"We expect the combination of these two factors—continued strong growth in its core SMB segment and incremental contribution from larger customers—to drive sustained, robust revenue growth and attractive long-term operating profitability."

He raised his price target for the stock to $30 (U.S.) from $25. Consensus is $28.43.

"We maintain a positive opinion of Zendesk's long-term corporate strategy, the company's unique technology platform that should position Zendesk to continue to gain market share in its core SMB segment as well as with larger organizations, and management's ability to execute its vision," said Mr. Winslow. "As a result, we have become increasingly positive on the sustainability of Zendesk's growth and expect the stock's growth-adjusted valuation gap to the broader [software as a service] universe to narrow."

Elsewhere, the stock was given a new rating of "outperform" at RBC Dominion Securities by analyst Ross Macmillan with a $27 target.

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Based on "strong" first-quarter 2016 results "supported by a significant improvement in expense leverage," BMO Nesbitt Burns analyst Kelly Bania upgraded Casey's General Stores Inc. (CASY-Q) to "market perform" from "underperform."

"We believe this quarter marks the second quarter in which the company has meaningfully improved operating expenses relative to merchandise sales growth," said Ms. Bania.

She raised her 2016 and 2017 earnings per share forecasts for the U.S. retailer to $4.60 and $5.18 from $4.20 and $4.64, respectively,  "primarily due to lower expenses."

"An improved expense outlook, plus the ongoing halo of lower gas prices, which positively affecting several aspects of Casey's business, including: 1) better expense trends supported by lower fuel, utilities, and credit card expenses; 2) solid gas gallon comps and customer traffic; and 3) trade-up toward premium brands in cigarettes … which provides improved visibility into earnings growth."

She raised her target price for the shares to $105 (U.S.) from $80. Consensus is $110.18.

"We now rate CASY shares Market Perform as we believe the outlook is more balanced, supported by: 1) improving expense leverage; 2) solid same-store sales momentum supported by the company's initiatives and unique pricing power; and 3) the favorable halo of lower gas prices," she said. "We believe the key risk relates to applying a peak historical P/E multiple on earnings that may be elevated by above average retail fuel gas margins."

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After stronger-than-expected fiscal second-quarter 2016 revenue and dividend growth results, North West Company Inc. (NWC-T) is likely to enjoy additional market share gains in the coming years as it focuses on lower-risk merchandise and services, said Industrial Alliance Securities analyst Neil Linsdell.

He upgraded his rating for the stock to "buy" from "hold."

The retailer's sales increase 11.9 per cent in quarter to $448.7-million from $401.1-million, beating Mr. Linsdell's 7.6-per-cent, $431.6-million estimate (and the $435-million consensus). He pointed to positive same-store sales growth and the positive impact of the rising U.S. dollar on sales in its international operations.

"The International operations in the Caribbean and Pacific regions appear to be on a positive trajectory, boosted by higher tourism spend, lower energy costs, and the benefit of the USD f/x translation," he said.

The company increased its quarterly dividend by 2 cents to 31 cents per share, a cent more than Mr. Linsdell had predicted.

"NWC shares trade within a range and are supported by the dividend yield. With the new annual dividend of $1.24, we expect the share price to be well supported in the $25.00-29.50 range," said Mr. Linsdell.

He raised his price target to $28 (Canadian) from $27.50. Consensus is $26.42.

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In other analyst actions:

Advanced Micro Devices Inc (AMD-Q) was raised to "market perform" from "underperform" at Bernstein by equity analyst Stacy Rasgon. The 12-month target price is $1.50 (U.S.) per share.

BP PLC (BP-N) was downgraded to "hold" from "buy" at Jefferies by equity analyst Jason Gammel. The target price is $33.00 (U.S.) per share.

Casey's General Stores Inc (CASY-Q) was raised to "market perform" from "underperform" at BMO Capital Markets by equity analyst Kelly Bania. The target price is $105 (U.S.) per share.

Conifex Timber Inc (CFF-T) was downgraded to "reduce" from "hold" at TD Securities by equity analyst Sean Steuart. The 12-month target price is C$3.50 per share.

Chevron Corp (CVX-N) was raised to "overweight" from "neutral" at JPMorgan by equity analyst Phil Gresh. The 18-month target price is $86 (U.S.) per share.

Dover Corp (DOV-N) was raised to "neutral" from "underweight" at JPMorgan by equity analyst Steve Tusa. The target price is $66 (U.S.) per share.

FirstEnergy Corp (FE-N) was rated new "overweight" at JPMorgan by equity analyst Christopher Turnure. The target price is $38 (U.S.) per share.

Finisar Corp (FNSR-Q) was downgraded to "neutral" from "buy" at B. Riley by equity analyst David Kang. The 12-month target price is $16.75 (U.S.) per share. It was also downgraded to "neutral" from "buy" at MKM Partners by equity analyst Michael Genovese with a 12-month target price of $15.50.

Helmerich & Payne Inc (HP-N) was downgraded to "underperform" from "hold" at Jefferies by equity analyst Brad Handler. The target price is $40 (U.S.) per share.

lululemon athletica Inc (LULU-Q) was raised to "outperform" from "neutral" at Robert Baird by equity analyst Mark Altschwager. The 12-month target price is $69 (U.S.) per share.

Motorola Solutions Inc (MSI-N) was downgraded to "underperform" from "market perform" at Wells Fargo by equity analyst Andrew Spinola.

Noble Energy Inc (NBL-N) was raised to "buy" from "hold" at Jefferies by equity analyst Jonathan Wolff. The 12-month target price is $37 (U.S.) per share.

Roper Technologies Inc (ROP-N) was downgraded to "underweight" from "neutral" at JPMorgan by equity analyst Steve Tusa. The target price is $158 (U.S.) per share.

VMware Inc (VMW-N) was raised to "positive" from "neutral" at Susquehanna by equity analyst J Wood. The 12-month target price is $96 (U.S.) per share.

West Fraser Timber Co Ltd (WFT-T) was raised to "buy" from "hold" at TD Securities by equity analyst Sean Steuart. The 12-month target price is $70 (Canadian) per share.

WhiteWave Foods Co (WWAV-N) was raised to "outperform" from "market perform" at Bernstein by equity analyst Alexia Howard. The 12-month target price is $56 (U.S.) per share.

Zoetis Inc (ZTS-N) was raised to "outperform" from "market perform" at BMO Capital Markets by equity analyst Alex Arfaei. The target price is $53 (U.S.) per share.