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.
TD Securities analyst Greg Barnes upgraded Cameco Corp. to "buy" from "hold" and substantially raised his price target, believing that the uranium market is on the cusp of a sustainable recovery.
"After three years in the wilderness, we believe that it's time to think about a positive turn in fundamentals for uranium and for Cameco," Mr. Barnes said in a research note as he jacked up his target to $31 (Canadian) from $22.
Sentiment in the uranium market should improve over the next two years, underpinned by Japanese nuclear plant restarts in the second half of this year, he said.
Mr. Barnes expects a relatively tight supply-demand balance for uranium this year, due to production expansion delays at Russian and Kazakh producers, the expiry of the U.S.-Russian Highly Enriched Uranium agreement at the end of last year, and lost production from a number of mines across the globe due to operating challenges over the past two months.
Meanwhile, Cameco should benefit from the ramping up of its Cigar Lake project in Saskatchewan, one of the largest undeveloped high-grade uranium deposits in the world. The company expects first production in the first quarter of this year, and Mr. Barnes forecasts the operation will produce 1.5 million pounds of uranium attributable to Cameco in its first year of production.
The average price target among analysts is $24.83, according to Thomson Reuters.
A deal reportedly struck between Russian potash giant OAO Uralkali and Chinese buyers could signify the end of the recent decline in potash prices, with a slow recovery now likely in the months ahead, said Cantor Fitzgerald Canada analyst Peter Prattas.
As such, he raised his price target on Potash Corp. of Saskatchewan Inc. to $35 (U.S.) from $31.
The new contract reportedly covers the first half of 2014 at a price of $305 (U.S.) per ton. While that was down from $400 in the first half of 2013 -- which was prior to the breakup of the cartel between OAO Uralkali and Belarus Potash Co. -- it was a bit higher than consensus expectations of about $300.
"While the deal is largely consistent with expectations, we view it as a positive development for the industry," Mr. Prattas said in a research note. "We believe it marks the bottom of a potash price decline and a level from which prices can slowly build."
There are other reasons for optimism, too, as recent data showed North American ending inventories of potash tightening to only 14 per cent above the historical average, he noted. It recently reached as high as 28 per cent.
Mr. Prattas maintained a "hold" rating but raised his earnings per share forecasts for 2015 to $2.33 from $2.14 because of higher assumptions for potash prices.
The average analyst price target is $32.14 (U.S.).
Dollarama Inc. may have spooked investors last week by reporting December sales were severely impacted by bad weather, but Raymond James analyst Kenric S. Tyghe believes this may actually be an ideal time to buy shares in the retail discount chain.
Mr. Tyghe upgraded his rating on Dollarama to "outperform" from "market perform" while raising his price target to $90 (Canadian) from $85. The average target is $94.21.
Dollarama same-store sales fell 7.5 per cent in December. But November's sales were actually stronger than he expected, which should partially mitigate the impact. Meanwhile, he notes that Dollarama's peers have also been challenged by the abnormal Canadian weather, as well as other sales execution problems, putting the stock in a good position to outperform similar retailers.
Shares in building construction contractor The Churchill Corp. have been rangebound over the last six months but are poised to break out to the upside this year, said TD Securities analyst Michael Tupholme.
He upgraded the stock to "buy" from "hold" and raised his price target to $12 (Canadian) from $9. The average analyst target is $9.58.
"We expect this upside to materialize as: 1) the market refocuses on (and Churchill delivers on) the meaningful turnaround potential within the company's General Contracting segment; and 2) investors reassess the significant size and relative undervaluation of the company's backlog," Mr. Tupholme explained.
"Although we acknowledge that it is likely to take at least another couple of quarters before Churchill shows clear evidence of the improved performance within its General Contracting segment that the market has been waiting for, we see the stock as offering an attractive risk/reward proposition at the current levels," he said.
Argonaut Gold Inc. is poised to outperform peers over the next 12 months thanks to a number of potentially positive catalysts, said Canaccord Genuity analyst Rahul Paul as he upgraded the stock to "buy" from "hold."
Among them: the ramping up of hard-rock mining operations at the La Colorada mine; the potential receipt of permits at the San Antonio project; and the possibility for growing resources at the San Agustin and Magino projects.
Mr. Paul also notes that the company's growth profile is fully funded for the next several years and a proven management team is in place.
He raised his price target to $8 (Canadian) from $6.75. The average analyst target is $6.80.
In other analyst actions:
Raymond James downgraded Strategic Oil & Gas to "market perform" from "outperform" and cut its price target to 75 cents (Canadian) from $1.20.
M Partners downgraded Coastal Energy to "hold" from "buy" and cut its price target to $19 (Canadian) from $22.
Desjardins upgraded Pengrowth Energy to "buy" from "hold" and raised its price target to $8 (Canadian) from $6.50.
Desjardins downgraded New Gold to "hold" from "buy" and cut its price target to $6.75 (Canadian) from $7.
Desjardins raised its price target on Sprott Inc. to $3 (Canadian) from $2.75 due to recent strong performance of precious metals commodities and stocks. It maintained a "hold" rating.
Desjardins downgraded Osisko Mining to "hold" from "top pick" and maintained a $6.75 (Canadian) price target.
Canaccord upgraded Endeavour Mining to "buy" from "speculative buy" but cut its target to $1 (Canadian) from $1.70.
Canaccord hiked its price target on Detour Gold to $4.25 (Canadian) from $2.50 and maintained a "sell" rating.
AltaCorp Capital downgraded Vicwest to "sector perform" from "outperform" and cut its price target to $12.50 (Canadian) from $15.
RBC Dominion Securities upgraded Paladin Energy to "outperform" from "sector perform" and hiked its price target to 75 cents (Australian) from 60 cents.
National Bank Financial initiated coverage on Tricon Capital Group with an "outperform" rating and $10 (Canadian) price target.
Raymond James initiated coverage on Baylin Technologies with an "outperform" rating and $9 (Canadian) price target.
For more analyst actions, breaking investing news and analysis, follow Darcy Keith on Twitter at @eyeonequities