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An Encana pump jack stands near Rockyford, Alberta.TODD KOROL/Reuters

Inside the Market's roundup of some of today's key analyst actions. This file will be updated often during the trading day so check back for new details.

Though he said Encana Corp. (ECA-N; ECA-T) has done a good job in repositioning its portfolio to achieve higher margin growth in the future, RBC Dominion Securities analyst Greg Pardy downgraded the stock to "sector perform" from "outperform" on the basis that there are higher potential returns elsewhere.

Mr. Pardy called 2014 a "transformational year" for Encana as it refocused its portfolio. The $7.1-billion acquisition of Athlon Energy provides access to the lucrative Permian Basin in the southwestern United States. Encana's business is now focused around four areas: Permian, Eagle Ford (Texas), Montney (Alberta and B.C.) and Duvernay facilities (Alberta). Mr. Pardy said the company's operating momentum "appears to be gaining traction" across those four assets.

"We believe that Encana has some of the best real estate on the block when it comes to North American resource plays and possesses solid execution capability," he said.

On Monday, the company reported a first-quarter loss of $1.7-billion (U.S.), compared with a profit of $116-million in the same period of 2014, due largely to the collapse in oil prices and impairment charges. However, its cash flow increased 31 per cent from the fourth quarter and it expects to deliver full-year capital savings of $300-million.

Mr. Pardy added:  "In our minds, Encana's next order of business is balance sheet deleveraging – an exercise that will likely involve cash flow growth and potentially non-core asset dispositions as we move into 2016," said Mr. Pardy. "Although Encana's average net debt-to-trailing cash flow ratio of 4.5x in 2015 should fall to 2.7x in 2016, we'd like to see even stronger balance sheet metrics, especially given its limited hedging positions next year."

The analyst raised his price target from $14 to $15 (Canadian) to reflect higher oil and liquids production and the expectation for reduced capital spending in 2016. The analyst consensus price target is $17.86, according to Thomson Reuters.


TD Securities analyst Scott Treadwell downgraded Trican Well Service Ltd. (TCW-T) from "speculative buy" to "hold" following the company's announcement that it will stop paying dividends to shareholders, blaming turbulent market conditions.

In the wake of first-quarter results that missed expectations, Trican also said it was contemplating the sale of its businesses in Russia and Kazakhstan, seeking relaxed conditions on debt agreements and forecasting a covenant breach in the second half of 2015.

Trican reported first-quarter earnings before interest, taxes, depreciation and amortization, and stock-based compensation of negative $17.6-million, missing Mr. Treadwell's forecast of negative $11.2-million, due largely to one-time costs involved with severance and facility closures. Its revenue of $476.1-million missed consensus estimates of $509.9-million.

"The company now forecasts that it will likely breach its debt covenants in the second half of the year, and although it is in negotiation with lenders, the company's entire debt balance could become due-on-demand should negotiations fail," said Mr. Treadwell. "It remains our view that covenant relaxation will occur, and that the potential sale of some international businesses (and possibly other assets) could improve but not fix the company's financial position."

He maintained his target price of $5 (Canadian), explaining: "Trican trades at a material discount on book value relative to the peer group, but we do not foresee that gap closing without material improvement in industry conditions and the balance sheet. We believe downside risks remain around the company's ability to negotiate debt covenant relief and potentially a sale of assets or segments."


Boyd Group Income Fund (BYD.UN-T) maintains its "torrid pace" with strong first-quarter results, said CIBC World Markets analyst Mark Petrie.

Boyd's U.S. same-store sales increased 5.8 per cent beat Mr. Petrie's forecast of flat results. Along with better-than-expected results from acquired business, it reported a "healthy revenue beat," he said. Earnings before interest, taxes, depreciation and amortization of $21.2-million topped Mr. Petrie`s $18.6-million estimate and the 2014 result of $15-million.

"Despite a slowing in the industry (claims were up 1 per cent in Boyd's regions) following a weather-driven 2014, Boyd has continued to outperform," the analyst said. "Along with its scale being increasingly attractive to insurance companies, Boyd's focus on improving operating processes has paid dividends, and we expect benefits to accrue as new processes are rolled out across the network."

He added: "Competition for acquisitions remains fierce, and as supply of larger targets has dwindled, multiples have predictably ticked up. Boyd remains disciplined, so it has lagged some peers, but it has clearly demonstrated an ability to create value even without the multiple arbitrage on [multi-shop operator] deals. We expect single location growth to remain robust and accelerate. "

He raised his price target to $66 from $63 (Canadian) and maintained his "sector outperform" rating.


A strong first-quarter performance and outlook coupled with recent "softening" in the stock price has caused Raymond James analyst Andrew Bradford to upgrade Black Diamond Group Ltd. (BDI-T) to "outperform" from "market perform."

The company, which rents modular buildings and equipment to be used as temporary accommodation and work space, reported a first-quarter earnings before interest, taxes, depreciation and amortization of $31-million, beating the consensus of $29-million. It also posted a 74-per-cent utilization in its workforce accommodation business, ahead of Mr. Bradford 's forecast of 63 per cent.

He is impressed with the company's attempts to find savings for customers through contract flexibility and potential service integration.

"BDI has, in several instances, agreed to shorter-term contract renewals, but at the same long-term rental rates," he said. "If all goes well, the only implication of this would be that the committed contract coverage would drift lower, but the revenue run-rate should remain unchanged. It does, however, imply a higher degree of risk. That said, BDI also indicated that the discourse and appetite over contract terms has improved over the last few months."

Mr. Bradford also raised his target price to $16.75 from $16 (Canadian). The analyst consensus is $17.


Though first-quarter results for Aecon Group Inc. (ARE-T) met expectations, BMO Nesbitt Burns analyst Bert Powell said he isn't confident about the company going forward.

Aecon reported adjusted earnings per share of 30 cents, in line with the consensus forecast, due largely to higher tax recovery. Its total revenue increased 8.6 per cent year over year to $501.5-million, ahead of Mr. Powell's estimate of $391-million and the consensus of $448-million.

"We would not be chasing the stock here. EBITDA was in line for the quarter, but the underlying contributions … looked nothing like what we expected," he said. "Mining had a strong quarter, while Infrastructure and Energy were weaker than expected. Q1 is seasonally the weakest, so perhaps the most challenging quarter to forecast. Given the number of moving parts, our confidence in the forecast remains low

He added: "Management's commentary remains positive, and there are prospects for large infrastructure wins, but we feel with the backing away from EBITDA margin targets that only modest improvements are to be expected. This is a construction company and volatility is the norm not the exception; we will simply wait for the volatility to bring the stock to us rather than chase it. We admittedly got off Aecon too soon on fears that weakness in Western Canada would be more of an impact than what turned out to be the case. Under normal construction company hiccups we may have stayed with it, but this is not a defensive name when demand wanes. "

Adjusting  for his EBITA and EPS forecasts for 2016, Mr. Powell raised his price target to $14 from $13.50 (Canadian). The analyst consensus is $16.02.

He maintained his "sector perform" rating.


Bonterra Energy Corp. (BNE-T) is poised to benefit from lower costs and higher energy prices, said Dundee Securities analyst Geoff Ready.

Bonterra's first-quarter production of 12,204 barrels of oil equivalent per day fell below the forecasts of both Mr. Ready (12,800) and the consensus (12,683) due largely to the closure of uneconomic wells. The company expects to bring those wells back on stream as early as the second quarter.

The company's cash flow per share of 68 cents narrowly beat the consensus estimate of 67 cents and Mr. Ready's 59-cent forecast, which he attributes to lower cash costs as the management focuses on cost reductions. Net debt was above estimates due to a deposit on the acquisition of oil and gas assets in the Pembina Cardium, which has since been completed.

Mr. Ready believes the company's first-quarter capital spending focus on drilling new wells will prove prescient as energy prices rise. He added:  "Bonterra will remain prudent with capital spending to keep the balance sheet in check."

He raised his target price to $46.50 from $43.50 (Canadian). The analyst consensus is $44.50.


In other analyst actions:

Canaccord Genuity downgraded Midway Gold (MDW-T; MDW-A) to "sell" from "hold" and slashed its price target to 10 cents (Canadian) from 60 cents.

Raymond James upgraded Black Diamond Group (BDI-T) to "outperform" from "market perform" and raised its price target to $16.75 (Canadian) from $16.

High Liner Foods Inc. (HLF-T) was downgraded to "market perform" from "buy" at Cormark Securities. The 12-month target price is $24 (Canadian) per share.

Inter Pipeline Ltd. (IPL-T) was raised to "buy" from "hold" at TD Securities. The 12-month target price is $35 (Canadian) per share. The stock was raised to "outperform" from "sector perform" at Alta Corp Capital with a  target price of $35 per share.

Pure Technologies Ltd. (PUR-T) was downgraded to "market perform" from "buy" at Cormark Securities. The 12-month target price is $8.75 (Canadian) per share.

Retrocom Real Estate Investment Trust (RMM.UN-T) was downgraded to "hold" from "buy" at Laurentian Bank. The 12-month target price is $4 (Canadian) per share.

WSP Global Inc. (WSP-T) was downgraded to "sector perform" from "outperform" at Alta Corp Capital. The 12-month target price is $45 (Canadian) per share.

Claude Resources Inc. (CRJ-T) was rated new "buy" at PI Financial. The 12-month target price is 95 cents (Canadian) per share.

ProntoForms Corp. (PFM-X) was rated new "buy" at Global Maxfin. The 12-month target price is 85 cents (Canadian) per share.

Perpetual Energy Inc. (PMT-T) was downgraded to "sector perform" from "outperform" at National Bank. The 12-month target price is $1.25 (Canadian) per share.

American Eagle Outfitters Inc. (AEO-N) was raised to "outperform" from "market perform" at Cowen. The 12-month target price is $19 (U.S.) per share.

Brookfield Renewable Energy Partners LP (BEP.UN-T) was raised to "outperform" from "market perform" at FirstEnergy Capital. The 12-month target price is $37 (U.S.) per share.

AOL Inc. (AOL-N) was downgraded to "hold" from "buy" at Evercore ISI. The 12-month target price is $50 (U.S.) per share.

Horizon Technology Finance Corp (HRZN-Q) was rated new "outperform" at Oppenheimer by equity analyst Christopher Kotowski. The 12-month target price is $15 (U.S.) per share.

Humana Inc (HUM-N) was downgraded to "underperform" from "neutral" at Sterne Agee CRT by equity analyst Brian Wright. The 12-month target price is $150 (U.S.) per share.

Kimberly-Clark Corp (KMB-N) was raised to "overweight" from "equal- weight" at Barclays by equity analyst Lauren Lieberman. The target price is $124 (U.S.) per share.

Magellan Health Inc (MGLN-Q) was raised to "buy" from "hold" at Jefferies by equity analyst David Styblo. The 12-month target price is $78 (U.S.) per share.

Martin Marietta Materials Inc (MLM-N) was raised to "positive" from "neutral" at Susquehanna by equity analyst Ted Grace. The 12-month target price is $181 (U.S.) per share.

Nabors Industries Ltd (NBR-N) was downgraded to "market perform" from "outperform" at BMO Capital Markets by equity analyst Daniel Boyd. The target price is $18 (U.S.) per share.

Royal Gold Inc (RGLD-Q) was rated new "hold" at Canaccord Genuity by equity analyst Peter Bures. The 12-month target price is $72.50 (U.S.) per share.

Vale SA (VALE-N) was downgraded to "neutral" from "outperform" at Macquarie by equity analyst Jeffrey Largey. The 12-month target price is $8.50 (U.S.) per share.

With files from Bloomberg News