Tuesday's analyst upgrades and downgrades

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

RBC Dominion Securities analyst Steve Arthur upgraded AutoCanada Inc. to "outperform" from "sector perform," believing that investors should snap up shares after their recent pullback.

AutoCanada stock is down about 18 per cent from its June highs, which were reached with the help of a series of positive events including a surge of acquisitions and higher earnings guidance. The recent pullback came amid little unexpected news, although the stock is still up 63 per cent so far this year, and up a stunning 388 per cent since the start of 2013.

"We see the recent pullback as an opportunity to buy ACQ at a reasonable valuation on current acquisition assumptions," said Mr. Arthur in a research note.

An increased pace of acquisitions has been the key driver behind AutoCanada's surging revenue, earnings and share price, with the company completing 11 dealer acquisitions just this year alone, up from eight last year.

Mr. Arthur notes that this acquisition momentum is intact and accelerating, as the company recently said it expects to buy an additional eight to 10 dealers over the next year. The company has raised $150-million in debt and $200-million in equity over the past three months, which Mr. Arthur believes will be adequate to fund recent acquisitions and reach its elevated guidance over the next year.

Following the recent share price weakness, AutoCanada stock trades at 19.4 times estimated 2015 earnings, which is still above U.S. peers at 14.6 times. But Mr. Arthur believes this premium is warranted given the strong growth expectations for the company.

He raised his price target to $92 (Canadian) from $91. The analyst consensus price target over the next year is $95.83, according to Thomson Reuters data.

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Raymond James analyst Daryl Swetlishoff downgraded Canfor Pulp Products Inc. to "outperform" from "strong buy" in anticipation of seasonal weakness in softwood pulp markets this summer.

"Recent trade journal reports of discounted spot NBSK (Northern bleached softwood kraft) pulp tonnage, often a harbinger of list price reductions, leads us to expect some seasonal softness in softwood pulp," Mr. Swetlishoff said in a research note.

But he stressed he continues to see "compelling value" in the stock longer term, and maintained a $17 (Canadian) price target. The stock is currently trading near $12.

"Looking forward, despite a widening softwood/hardwood pulp price gap, we expect the fall maintenance season to result in pulp markets firming," he said.

The analyst consensus price target for Canfor Pulp Products over the next year is $14.71.

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Fiscal fourth-quarter performance fees at Gluskin Sheff + Associates Inc. came in well ahead of forecasts, which could lead to the asset manager declaring an 80 cents per share special dividend, said RBC Dominion Securities analyst Geoffrey Kwan.

Late Monday, Gluskin Sheff announced preliminary fourth-quarter performance fees of $53-million, far surpassing Mr. Kwan's forecast of $20-million. Assets under management and net sales also beat his expectations.

"We believe this news underscores our positive view of GS and that its continued strong investment performance is helping to increase assets under management, improve net sales, and generate significant performance fees," Mr. Kwan said in a note.

"A rising interest rate environment historically has been very positive for asset manager stocks and GS is our favourite asset manager stock," he added.

Any special dividend would likely be announced in September when the company reports final fourth-quarter results.

Mr. Kwan raised his price target by $1 to $40 (Canadian) and reiterated an "outperform" rating. Gluskin Sheff shares are up nearly 5 per cent in TSX trading this afternoon.

The analyst consensus price target over the next year is $34.17.

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Successful exploration results and a recent acquisition have lowered risk and created opportunity for growth at Parex Resources Inc., according to Credit Suisse analyst David Phung.

Mr. Phung noted that Parex's proved and probable reserves grew by about 80 per cent in the first half of 2014, primarily driven by exploration successes and the acquisition of Verano Energy.

"With the growth in reserves, the development drilling inventory in all reserve categories has also grown alongside," he says. "We believe this expansion further mitigates downside production risk by providing a relatively lower risk development portfolio."

Mr. Phung upgraded Parex to "outperform" from "neutral" and boosted his target price to $18.50 (Canadian) from $13. The analyst consensus price target over the next year is $14.95.

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Paramount Resources Ltd.'s growth rate has earned it a target price hike by CIBC World Markets analyst Adam Gill.

"We continue to like the POU story and believe it is one of the most attractive gas investments today," said Mr. Gill. "POU offers superior growth at 103 per cent in 2015 and 26 per cent in 2016, and has a number of latent value opportunities, including Liard Shale gas, oil sand, and Duvernay exploration."

Mr. Gill maintained his "sector outperformer" rating and raised his target price to $72.50 from $65 (U.S.). The analyst consensus price target over the next year is $73.20, according to Thomson Reuters.

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In other analyst actions:

Dundee Securities upgraded Cameco to "buy" from "neutral" and cut its price target to $23.80 (Canadian) from $24.50. It cited recent share price weakness for the upgrade.

Dundee Securities downgraded Uranerz Energy to "sell" from "neutral" and cut its price target to $1.50 (Canadian) from $1.60.

Dundee Securities downgraded UEX Corp. to "neutral" from "buy" and cut its price target to 70 cents (Canadian) from 80 cents.

Raymond James upgraded Methanex to "strong buy" from "market perform" and raised its price target to $80 (U.S.) from $75.

CIBC World Markets raised its price target on Lake Shore Gold to $1.50 (Canadian) from $1 and maintained a "sector performer" rating.

Acumen Capital upgraded Input Capital to "buy" from "speculative buy" and raised its price target to $4.50 (Canadian) from $3.60.

Susquehanna raised its price target on Apple to $115 (U.S.) from $104 and maintained a "positive" rating.

Goldman Sachs downgraded Kellogg to "sell" from "neutral" and cut its price target to $59 (U.S.) from $64.

UBS upgraded Whiting Petroleum to "buy" from "neutral" and raised its price target to $98 (U.S.) from $89.

UBS upgraded Aecom Technology to "buy" from "neutral" and raised its price target to $40 (U.S.) from $33.

Evercore Partners downgraded Time Warner to "equal weight" from "overweight" with a price target of $75 (U.S.).