Kevin Van Paassen/The Globe and Mail
Inside the Market's roundup of some of today's key analyst actions. This file will be updated during the trading day. For breaking analyst actions prior to market open every day, read our Before the Bell morning report.
CIBC World Markets analyst Adam Gill downgraded Legacy Oil + Gas Inc. to "sector performer" from "sector outperformer," citing a shortage of options to accelerate growth at the company.
Legacy, he said, has little financial flexibility to grow, despite having a solid inventory of drilling targets.
"We believe that without the ability to increase spending while improving leverage, peers will advance value creation at a superior rate," Mr. Gill said in a research note. "The company has to find a non-debt financing solution to accelerate growth which would rejuvenate share price momentum. Until such time, we believe the stock will continue to trade at a depressed valuation level."
Mr. Gill cut his price target to $7.50 (Canadian) from $9. The average price target among analysts is $9.26, according to Thomson Reuters.
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CIBC's Mr. Gill upgraded Birchcliff Energy Ltd. to "sector outperformer," believing that the stock is trading at an attractive valuation for a company with a solid foundation in the prolific Montney formation in Western Canada.
Birchcliff trades at an enterprise value 6.6 times estimated debt-adjusted cash flow. That's near a record low ratio and well below gas peers at 7.4 times. The company is better positioned than most peers to see cash flows grow if natural gas prices continue to rally, he said.
Mr. Gill raised his price target to $10.25 (Canadian) from $9.75. The average analyst target is $9.88.
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Monday's announcement of a $2.6-billion hostile bid by Goldcorp Inc. for rival Osisko Mining Corp. is favourable for Osisko, but doesn't warrant a change in rating or price target, according to CIBC World Markets analyst Cosmos Chiu.
At $5.95 a share, the bid was a 15-per-cent premium for Osisko shares based on last Friday's closing prices. Mr. Chiu says the first offer price looks conservative, with room to move higher. He also thinks Osisko is unlikely to attract a second "white knight" investor, given the potential size of the transaction, although the miner's recent operational consistency "would be attractive to other potential bidders".
Mr. Chiu maintains his "sector outperformer" rating and $7 (Canadian) target price. The average analyst target is $6.56.
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Google Inc. has earned a ratings upgrade from Wells Fargo analyst Peter Stabler, thanks to the online giant's ability to capture a good chunk of advertising dollars as they migrate to online media.
"We anticipate Google will strengthen its leadership position in the fight for brand budgets and raise 2013/2014 EPS from $43.82/$51.83 to $44.30/$54.4," said Mr. Stabler. "Simply said, Nielsen quintile data clearly points to online video as an ideal campaign supplement to aid reach of light-viewing linear TV consumers, a critically important audience for most TV advertisers."
Mr. Stabler raised his rating to "outperform" from "market perform." He also raised his price target to $1,300-$1,350 from $900-$1,000 (U.S.).
The average analyst target is $1,150.
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Credit Suisse analyst Stephen Ju upgraded Electronic Arts Inc. to "outperform" from "neutral," suggesting investors should take advantage of recent share price weakness for longer-term gains.
He cited three reasons for optimism: the continued rationalization of its gaming portfolio will help contain costs; there's better visibility on the company's long-term product roadmap; and the stock is trading at a more attractive valuation given its recent pullback on development-related concerns over the Battlefield 4 video game.
Mr. Ju cut his price target slightly to $29 (U.S.) from $30 after making extensive changes to his model for company. The average analyst target is $27.63.
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In other analyst actions:
Credit Suisse cut its price target on Pacific Rubiales to $18 (Canadian) from $21 and maintained a "neutral" rating, primarily due to the potential of an unfavourable reserve revision at the Rubiales field.
CIBC upgraded Fortuna Silver Mines to "sector outperformer" from "sector performer" and raised its target to $5 (Canadian) from $4.
CIBC downgraded Cequence Energy to "sector underperformer" from "sector performer" and cut its target to $2 (Canadian) from $2.10.
CIBC downgraded Strategic Oil & Gas to "sector underperformer" from "sector performer" and cut its price target to 95 cents from $1.10.
BMO Nesbitt Burns cut its price target on Lululemon to $50 (U.S.) from $59 and reiterated a "market perform" rating.
JPMorgan upgraded Intel to "overweight" from "neutral" and raised its price target to $29 (U.S.) from $20.
Citigroup downgraded Microsoft to "neutral" from "buy" with a price target of $35 (U.S.).
Barclays downgraded Family Dollar Stores to "underweight" from "equalweight" and cut its price target to $54 (U.S.) from $67.
Barclays downgraded Sirius XM Radio to "equalweight" from "overweight" and cut its price target to $4 (U.S.) from $4.50.
FBR Capital upgraded Southern Copper to "outperform" from "market perform" and raised its price target to $35 (U.S.) from $30.
BMO Nesbitt Burns upgraded U.S. Steel to "outperform" from "market perform" and raised its price target to $37 (U.S.) from $19.
UBS initiated coverage on Capital One Financial with a "buy" rating and $87 (U.S.) price target
UBS initiated coverage on Discover Financial with a "neutral" rating and $56 (U.S.) price target.
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For more analyst actions, breaking investing news and analysis, follow Darcy Keith on Twitter at @eyeonequities
Darcy Keith