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A Chevron sign is displayed at a gas station in Buckeye, Ariz., in this Oct. 27, 2011 file photo.JOSHUA LOTT/Reuters

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

The world's biggest oil companies need to rapidly adjust to the new oil price environment, says Citigroup, which downgraded a number of names in the space this morning.

"We expect cost-cutting to be the emerging theme at end-January fiscal year results, with capacity for industry self-help (cost-cutting plus growth) to imbed a 200-400 basis point return on equity improvement over the next three years," said analyst Alastair Syme.

Citigroup believes the price of Brent crude oil will average $62 per barrel in 2015 before rebounding to a long-run price of $75 per barrel.

Chevron Corp. has been able to outperform its peers during the drop-off in oil, and as such, now offers little upside, according to the analyst.

"CVX earnings sensitivity to oil price is slightly above peer group average, reflecting royalty/tax bias to production and lower tax rate," he said. "That sensitivity becomes bigger by 2017 as the new growth from Gulf of Mexico and Australia shifts the weighting of the portfolio."

The analyst lowered his rating on the stock to "neutral" from "buy" and cut his price target to $115 (U.S.) from $125.

Portugal-based energy firm Galp Energia has a poor risk/reward profile, according to Citigroup, as corruption investigations in Brazil threaten its projects in the country.

"High investment levels sees GALP free cash flow negative (post-capex and dividends) until 2018 on our new oil price forecasts," said analyst Michael Alsford. "If lower oil prices persist, we expect GALP will look to sell non-core assets within its portfolio (for example, its regulated gas assets in Portugal."

The analyst reduced the stock's rating to "neutral" from "buy" while maintaining a target price of  €10.

Repsol S.A.'s purchase of Talisman Energy Inc. won't be that beneficial to the company, according to Mr. Syme.

"Our key change is that under our revised oil assumption the recent Talisman acquisition looks marginal in value, and certainly lower than the oil-rebound scenario that management look to have baked-in to the deal," he said. "The result is a balance sheet that we think could prove under some stress in this down-cycle."

The analyst believes this transaction will boost the company's ability to generate cash, but also lower its earnings growth.

He cut his price target to €16 from €21 and downgraded the stock to "neutral" from "buy."

Italian multinational oil and gas company Eni S.p.A. remains unattractive despite faring worse than its competitors on a one-year and three-year basis, says Mr. Syme.

"Weaker oil prices, the continued drag of the underperforming non-E&P businesses (including the failure to offload Saipem) and the ongoing disruption in Libya we think leaves the valuation expensive in both absolute and relative terms," he said. "Our 2015-18 forecasts see comparatively little growth across the Eni business, with risks to the downside if the expected recovery in the non-E&P businesses (Gas & Power, Downstream, Saipem) fails to materialize."

The market, Mr. Syme notes, currently expects the company to trim its dividend by 15 per cent this year.

He downgraded the stock to "sell" from "neutral" and lowered his target price to €13 from €16.50.

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Artis Real Estate Investment Trust widely underperformed the Canadian REIT market last year, opening up an attractive entry point, Raymond James analyst Ken Avalos said.

Last year was a decent one for the TSX Capped REIT index, which rose by about 10 per cent, compared to a 2-per-cent gain on the year for Artis.

"While we remain concerned about the impact that falling oil prices may have on Western Canadian exposure, especially the office sector, we feel the current uncertainty is priced into the stock at this point," Mr. Avalos said.

Artis units trade at a 12-per-cent discount to net asset value, making it one of the most undervalued names in Raymond James's coverage universe, Mr. Avalos said.

U.S. exposure on the order of about one-quarter of net asset value will help Artis to offset the risk of a slowdown in the Western Canadian economy, he added.

Mr. Avalos upgraded Artis to "outperform" from "market perform," and applied a $16 (Canadian) price target.

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Caterpillar Inc.'s indirect exposure to the oil and gas sector "may be greater than anticipated," says J.P. Morgan.

Beyond its direct exposure, which comprises about 12 per cent of its revenues, the outlook for equipment sales in related industries to areas of the U.S. in which fracking has been prevalent, the Canadian oil sands, and emerging markets facing pressure from low oil prices has dimmed considerably.

"Overall, CAT's combined indirect exposure may be as much as 15 per cent of its revenues – implying that upwards of 30 per cent of its total revenue may come under increasing pressure in 2015/16," said analyst Ann Duignan.

Ms. Duignan also cited the stronger dollar as a headwind for the company, and cut her estimate for earnings per share in 2015 to $6.70 from $6.90.

The analyst downgraded the stock to "underweight" from "neutral" and lowered her price target to $80 (U.S.) from $95.

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After another difficult year for base metals, commodity weakness will likely continue through 2015, with a select few mining companies poised to surmount market challenges, Desjardins Securities analyst Jackie Przybylowski said.

"Many companies in our coverage universe lost significant value in 2014, as investors grew increasingly uncertain about global demand for commodities and financing for development-stage projects," Ms. Przybylowksi said.

That kind of environment favours positive shorter-term company catalysts and prefers near-term cash flows in target prices, the analyst said.

Among the base metal miners most likely to generate positive catalysts over the next year is Nevada Copper Corp. "In addition to permitting and production start events expected in 2015, we believe the company will be an increasingly attractive acquisition target as visibility to obtaining permits improves," Ms. Przybylowksi said.

She reiterated Nevada Copper Corp. as a top pick in the space at a target price of $4.50 (Canadian). The other top pick for this year is Taseko Mines Ltd. "We believe that Taseko will lay the groundwork in 2015 for improved production volumes in 2016."

The analyst also implemented the following rating changes on other Canadian base metal mining companies:

Copper Mountain Mining Corp. was upgraded to "buy" from "hold" at a target price of $3; New Millennium Iron Corp. was downgraded to "sell" from "hold" at a target price of $0.10; and Teck Resources Ltd. was upgraded to "buy" from "hold" at a target price of $26.50.

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In other analyst actions:

Goldman Sachs downgraded CGI Group to "neutral" from "buy" but with a price target of $41 (U.S.), up from $40.

Brookfield Renewable Energy Partners LP /CA was rated a new "overweight" at Barclays. The target price is $36 (U.S.).

Brookfield Infrastructure Partners LP was rated a new "equal- weight" at Barclays. The target price is $43 (U.S.).

Detour Gold was raised to "top pick" from "buy" at Cormark Securities. The 12-month target price is $18.75 (Canadian).

First Quantum Minerals was raised to "buy" from "market perform" at Cormark Securities. The 12- month target price is $22.50 (Canadian).

Adriana Resources was downgraded to "hold" from "buy" at Desjardins Securities. The target price is 20 cents (Canadian).

Merck & Co was raised to "outperform" from "market pPerform" at Sanford Bernstein. The 12-month target price is $68 (U.S.).

Novartis was raised to "outperform" from "market perform" at Cowen. The 12-month target price is $105 (U.S.).

Starbucks was downgraded to "neutral" from "buy" at Janney Montgomery. The 12-month target price is $85 (U.S.).

L Brands was raised to "hold" from "underperform" at Jefferies. The target price is $85 (U.S.).

Intel was raised to "buy" from "neutral" at MKM Partners. The 12-month target price is $45 (U.S.).

Wells Fargo was downgraded to "neutral" from "outperform" at Robert Baird. The 12-month target price is $55 (U.S.).

Carnival was raised to "outperform" from "market perform" at Raymond James. The 12-month target price is $54 (U.S.).

CF Industries Holdings was raised to "overweight" from "neutral" at Piper Jaffray. The 12-month target price is $327 (U.S.).

Jefferies upgraded Gap to "buy" from "hold" with a price target of $50 (U.S.). It also named the stock its best new idea for 2015.

With files from Bloomberg

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