Maple Leaf Foods may be undervalued

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Inside the Market's roundup of some of today's key analyst actions

Maple Leaf Foods Inc. stock appears undervalued, "given its margin enhancement potential, which we believe will result in substantial earnings momentum," said Canaccord Genuity analyst Derek Dley.

Profit margins at Maple Leaf's protein division have improved, but the food producer now faces higher input costs that it will try to pass along to the consumer through price increases at the start of 2013, he said. "There is likely to be some short-term pressure on margins. However, as Maple Leaf continues to execute on its strategic plan, we expect margins to rise over the back half of the year."

Upside: Mr. Dley rates the stock "buy" and has a $16 price target.

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RBC Dominion Securities analyst Mark S. Mahaney has grown more bullish on Internet travel site Priceline.com in the wake of the company's better-than-expected fourth-quarter results.

The site's total bookings were up 35 per cent from a year ago, with international markets showing growth in particular.

Mr. Mahaney thinks the international segment could grow by 40 per cent this year, especially given successful expansions into Asia Pacific and Latin American markets. Meanwhile, rental car bookings are also becoming a growth driver.

"With comparable (periods) getting easier, PCLN benefiting from 'less worse' European markets, and second half 2013 marking the anniversarying of PCLN's ramped up marketing efforts, a material earnings per share growth acceleration scenario is very realistic," he said. "Stocks usually work well in that scenario, especially if their current valuation is reasonable. This is PCLN."

Upside: Mr. Mahaney raised his price target to $900 (U.S.) from $770 and maintained an "outperform" rating.

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TransForce Inc. is likely to continue to improve profitability by focusing on efficiency initiatives and cost optimization, said Desjardins Securities analyst Benoit Poirier.

The transportation company's "solid" free cash flow and improving debt metrics augur well for a potential dividend increase, Mr. Poirier wrote in a research note, adding that these help in "positioning it for renewed M&A activity in 2013."

Upside : Mr. Poirier ranks Transforce as his "top pick" with a $25 target price.

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Calfrac Well Services Ltd. missed earnings expectations as its U.S. revenue declined more quickly than anticipated, said Raymond James analyst Andrew Bradford.

"We suspect the market had been holding Calfrac to a high standard with its U.S. operations. And to be fair, prior to the fourth quarter, Calfrac's U.S. business had held up better than average with its Bakken and Marcellus core areas and contracts," he wrote in a research note. "However, competitive dynamics in U.S. fracturing have been evolving rapidly, and equipment and people have been migrating from weaker geographies to higher margin regions, like the Bakken. We think this mobility coupled with excess equipment supply will conspire to keep a lid on sustained pricing recoveries for at least the balance of 2013."

Downside : Mr. Bradford rates the stock "market perform" and has a $27.00 price target.

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Parkland Fuel Corp. saw a weaker-than-expected fourth quarter, but the market reaction to the news was too harsh given "nothing suggested that PKI's longer-term story has been impaired," said CIBC World Markets analyst Kevin Chiang.

He upgraded the stock to "sector outperformer" from "sector performer," applauding its positives such as a 6.4 per cent yield, improved balance sheet, and coherent growth strategy.

Upside: Mr. Chiang trimmed his price target to $19.50 from $20.50.

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