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The F-35 Lightning II fighter aircraft.LOCKHEED MARTIN/The New York Times

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.

Investors view Lockheed Martin Corp. (LMT-N) as the "bellwether" of the U.S. defence sector and the overall health of the country's Department of Defense budget, according to RBC Dominion Securities analyst Robert Stallard.

Given his view that the Department's budget is "back on a growth path," Mr. Stallard upgraded his rating for the stock to "outperform" from "sector perform."

The analyst expects there to be upward pressure on the sector's estimates moving forward. He said that should compliment Lockheed's existing growth from defence exports, which accounts for almost 20 per cent of its sales.

"Lockheed's key program is the F-35, representing [approximately] 20 per cent of revenues," said Mr. Stallard. "After several years of budget uncertainty impacting the program ramp, we think the return to growth in the DoD budget, and improved defence spending by partner countries increases the chances of the plan now sticking. Not only should this mean a significant increase in delivery volumes (45 in 2015 going to potentially 100+ in 2020), it should help Aeronautics margins, especially as F-35 moves to fixed price."

He added: "Record low interest rates, and Lockheed's focus on paying a sector leading dividend, have helped the stock in recent years. However, anticipation of the recent base rate increase has probably weighed on sentiment, and LMT has only performed in line with the overall market (+3 per cent) over the last three months. We think gradual interest rate increases are now priced in from a sentiment perspective, whilst the benefit to Lockheed's FAS pension expense over time should help EPS estimates."

Mr. Stallard raised his price target for the stock to $250 (U.S.) from $220. The analyst consensus target price, according to Thomson Reuters, is $230.27.

"Although 2016 looks likely to be a transition year for Lockheed, as it incorporates Sikorsky and parts with [its Information Systems & Global Solution segment], we think investors will increasingly look beyond this to a cleaner 2017. From next year, we think the benefits of the improving DoD budget environment should be clearer, complementing the already robust export situation, pension tailwinds and shareholder friendly capital deployment strategy. With the valuation now back in line with peers (15 times estimated 2017 price to earnings), we see this as an attractive entry point."

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In reaction to recent share price appreciation and a "tepid" outlook in the near term, TD Securities analyst Scott Treadwell downgraded his rating for Calfrac Well Services Ltd. (CFW-T) to "hold" from "buy."

"We believe that the focus for investors is now not entirely directed towards the balance sheet and short-term liquidity risk; however, Calfrac's elevated debt levels remain a key issue in our view," he said. "As a result, the stock has moved up by almost 50 per cent in the last two weeks. Conversely, with the ongoing weakness in the pumping segment, our 2016 estimates have decreased by 11 per cent on our lower commodity price deck."

Mr. Treadwell said he sees few short-term positives for the pressure pumping segment, particularly in the United States where he feels oversupply "seems to be more material than in Canada."

"We believe that incremental price pressure will play out through the first half of the year, but should subside by mid-year as improving commodity prices aid producers' cash flow," the analyst said. "The bright spot for Calfrac remains in Argentina, where a change in government and ongoing successes in evaluating shale formations should at the very least keep capital flowing into the country. In our view, although the company has reduced liquidity risk, debt levels remain elevated and will continue to weigh on a full recovery of valuation as the industry recovers."

He lowered his earnings per share forecast for 2016 to a loss of 88 cents from 83 cents. His price target was unchanged at $2.25, compared to a $3.10 consensus.

"Given the lack of clarity surrounding North American activity and the current commodity price environment, we remain cautious on the short/medium-term outlook and the company's ongoing high levels of overall debt," he said. "However, we continue to view Calfrac as a strong pressure pumper owing to its combination of prudent management, a strong customer list and international presence."

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Wedbush analyst James Hardiman expressed concern about the healthy valuation for gun maker Smith & Wesson Holdings Corp. (SWHC-Q), which has seen shares soar more than 165 per cent over the past year.

He downgraded the stock to "neutral" from "outperform" and said: "We are taking money off the table."

Shares of gun manufacturers soared on Tuesday after U.S. President Barack Obama announced new gun control measure that would require sellers to get licenses and more buyers to undergo background checks.

Smith and Wesson also said revenue for the quarter ending Jan. 31 may be as high as $180-million (U.S.), a 16-per-cent increase from its forecast given in December

The company's shares rose 11 per cent on Tuesday to $25.86 at the close in New York, the highest value since the shares began trading in February 1999.

"While gun industry sales are clearly in 'surge' mode, it is difficult to discern just how much of these sales are in fact incremental to the industry versus pulled-forward demand, with plenty of historical examples of both," the analyst said.

He did raise his target price for the stock to $26 (U.S.) from $24. The analyst average, according to Bloomberg, is $26.

Elsewhere, BB&T Capital Markets analyst Brian Ruttenur upgraded his rating for the company to "buy" from "hold" with a $28 target.

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RBC Dominion Securities analyst Derek Spronck said he does not see a scenario where a buyer would pay an "excessive" premium for Progressive Waste Solutions Ltd. (BIN-N, BIN-T), calling an outright sale "highly conjectural."

On Tuesday, the waste management company announced it was beginning a review of its strategic options shortly after Bloomberg reported company advisers had been recently approached by potential buyers.

"While we do not see one standalone buyer as likely, we do believe there could be multiple buyers interested in major components of BIN or several different corporate restructuring possibilities," said Mr. Spronck. "Pinpointing synergies and what could be considered normalized earnings is a more difficult task; however, our sale-of-the-parts analysis points to a potential valuation of $30 per share, [approximately] 20-per-cent implied upside from yesterday's close."

He added: " A key question following the announcement was why now? We think the timing makes sense. First, we believe Progressive is set to announce the NYC disposal contract, which if they have secured makes their U.S. East assets much more attractive and more easily shopped. Second, we believe 2016 EBITDA guidance (set to be released with Q4/15 results in February) could disappoint with consensus currently at $512-million (RBC at $492-million). While currency translation is contributing to the brunt of the impact, we do see headwinds from western Canada further exacerbating. Combined with the catch-up maintenance expense planned in the first half of the year, an earnings inflection isn't likely shaping up until 2017. The notion of a potential corporate restructuring could unlock some of the value today and may placate investors with a shorter investment horizon."

Mr. Spronck maintained his "sector perform" rating for the stock and bumped his target price by a dollar to $28 (U.S.). The analyst average is $27.97.

"The fact that Progressive is willing to explore strategic alternatives is a positive for the shares in our view," he said. "However, an outright sale is by no means a given and still very hypothetical. Furthermore, the fundamental focus remains on execution and for that matter, 2016 is shaping up to be another challenging year. As such, while we see a near term lift in the shares, we recommend investors take profits should the BIN shares approach our fundamental value of $28."

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Though he remains a "big fan" of the business model of Tyco International Ltd. (TYC-N), RBC Dominion Securities analyst Deane Dray said he now favours "safer havens over cyclical exposures."

Accordingly, he downgraded his rating for Tyco stock to "sector perform" from "outperform."

"Tyco was one of the more puzzling stocks in the multi-industry sector of 2015," he said. "The stock's 27-per-cent slide placed it in the ranks of the most oil-leveraged industrials. We recognize that Tyco's mid-year confession to having [about] 5-per-cent high-margin revenue exposure to oil put the company in the proverbial penalty box for many investors. A series of guidance cuts and anemic [non-residential] traction also weighed on sentiment. The shares have now been de-rated to the lowest level since the 2012 breakup. Stepping back, we still have confidence in the management team and believe that execution has been solid, including restructuring, project selectivity, and bolt-on M&A. We also like its 40-per-cent-plus leverage to nonresi, but this end market looks positioned for muted growth in 2016. At this stage in the economic cycle and the onset of the Fed's tightening cycle, our bias is to 'inch up the quality curve' and favour safer haven names with more earnings visibility and less earnings cyclicality. Weighing all these factors and seeing minimal positive catalysts, we are downgrading Tyco."

Mr. Dray lowered his 2016 earnings per share projection by a dime to $2.05, which is at the low-end of the company's guidance range of $2.05 to $2.20 and lower than the consensus estimate of $2.12. He also lowered his 2017 forecast by 10 cents to $2.30.

"Though Tyco leaned against the worst of the oil and FX headwinds that pressured 2015 fiscal year results, its initial outlook for FY2016 suggests these same operating challenges will carry over at least partly into the next year," the analyst said.

"On the operating side, the worst of the headwinds are expected in the first half of 2016, with year-over-year comps easing by the second half. This is expected to create an even more back-end weighted year than Tyco's typical second half-heavy seasonality, and we expect investors will remain wary of the dreaded 'second-half ramp.'"

Though he noted the relative price-to-earnings valuation is at its lowest point since 2012 and appears "enticing," he sees few catalysts to support a return to historical averages. He lowered his price target for the stock to $34 from $41. Consensus is $39.50.

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The risk-reward for shares of Genomic Health Inc. (GHDX-Q) has "swung to the upside," according to Canaccord Genuity analyst Mark Massaro.

Citing a Medicare reimbursement decision for its prostate test in October and "higher visibility" for test growth, Mr. Massaro moved his rating to "buy" from "hold."

"Despite the big [approximately] 50-per-cent run up in the stock post third-quarter results, we think GHDX remains undervalued (3.4 times and 3.1 times 2016 and 2017 revenues) based on the strong fundamentals," he said.

In recent interviews with urologists and a survey of 107 doctors, the analyst said he found  more doctors are aware of Genomic's prostate test than that of rival Myriad Genetics Inc. (MYGN-Q) "despite MYGN's first-mover advantage, which we think is a testament to GHDX's solid early marketing and commercial initiatives."  He found 56 per cent of physicians are likely or highly likely to order Genomic's test versus 48 per cent for Myriad.

"Our model assumes that GHDX captures what we view as a reasonable 4 per cent and 7 per cent of the $500-million+ U.S. prostate market opportunity over the next two years, which in our model assumes the OncotypeDx Prostate test adds an incremental $22-million (6.5 per cent of revenues) and $330-million (9 per cent of revenues) to its top line in 2016 and 2017, respectively," he said.

He raised his target price for the stock to $44 (U.S.) from $26. Consensus is $30.68.

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In other analyst actions:

Arista Networks Inc. (ANET-N) was rated new "neutral" at UBS by equity analyst Steven Milunovich. The 12-month target price is $85 (U.S.) per share.

Credicorp Ltd. (BAP-N) was raised to "overweight" from "neutral" at JPMorgan by equity analyst Saul Martinez. The target price is $132 (U.S.) per share.

Becton Dickinson and Co. (BDX-N) was downgraded to "hold" from "buy" at Evercore ISI by equity analyst Vijay Kumar. The 12-month target price is $160 (U.S.) per share.

Cardinal Health Inc. (CAH-N) was downgraded to "market perform" from "outperform" at Raymond James by equity analyst John Ransom.

Chinook Energy Inc. (CKE-T) was downgraded to "hold" from "buy" at TD Securities by equity analyst Juan Jarrah. The 12-month target price is 55 cents (Canadian) per share.

Colgate-Palmolive Co. (CL-N) was rated new "overweight" at Atlantic Equities by equity analyst Charles Eden. The 12-month target price is $74 (U.S.) per share.

Community Health Systems Inc. (CYH-N) was downgraded to "underperform" from "market perform" at Raymond James by equity analyst John Ransom.

Hyatt Hotels Corp. (H-N) was downgraded to "neutral" from "overweight" at JPMorgan by equity analyst Joseph Greff. The target price is $50 (U.S.) per share.

HCA Holdings Inc. (HCA-N) was raised to "strong buy" from "outperform" at Raymond James by equity analyst John Ransom. The 12-month target price is $95 (U.S.) per share. It was downgraded to "market perform" from "outperform" at Leerink Partners by equity analyst Ana Gupte with a 12-month target price of $74 per share.

Masco Corp. (MAS-N) was raised to "outperform" from "neutral" at Macquarie by equity analyst Michael Wood. The 12-month target price is $33 (U.S.) per share.

McKesson Corp. (MCK-N) was downgraded to "outperform" from "strong buy" at Raymond James by equity analyst John Ransom. The 12-month target price is $225 (U.S.) per share.

Manitok Energy Inc. (MEI-T) was downgraded to "reduce" from "hold" at TD Securities by equity analyst Juan Jarrah. The 12-month target price is 10 cents (Canadian) per share.

Patterson Cos Inc. (PDCO-Q) was raised to "buy" from "hold" at Evercore ISI by equity analyst Michael Cherny. The 12-month target price is $52 (U.S.) per share.

Procter & Gamble Co. (PG-N) was rated new "neutral" at Atlantic Equities by equity analyst Charles Eden. The 12-month target price is $84 (U.S.) per share.

Rite Aid Corp. (RAD-N) was downgraded to "hold" from "buy" at Evercore ISI by equity analyst Ross Muken. The 12-month target price is $9 (U.S.) per share.

Slate Office REIT (SOT.UN-T) was raised to "buy" from "hold" at Canaccord Genuity by equity analyst Mark Rothschild. The target price is $7.50 (Canadian) per share.

Teradata Corp. (TDC-N) was downgraded to "underweight" from "equal-weight" at Barclays by equity analyst Raimo Lenschow. The target price is $23 (U.S.) per share.

Teleflex Inc. (TFX-N) was raised to "strong buy" from "outperform" at Raymond James by equity analyst Lawrence Keusch. The 12-month target price is $150 (U.S.) per share.

United Technologies Corp. (UTX-N) was downgraded to "neutral" from "buy" at Sterne Agee CRT by equity analyst Peter Arment. The 12-month target price is $100 (U.S.) per share.

Vermilion Energy Inc. (VET-T) was raised to "outperform" from "neutral" at Macquarie by equity analyst Chris Feltin. The 12-month target price is $55 (Canadian) per share.

Walgreens Boots Alliance Inc. (WBA-Q) was raised to "buy" from "hold" at Evercore ISI by equity analyst Ross Muken. The 12-month target price is $94.50 (U.S.) per share.

Workday Inc. (WDAY-N) was downgraded to "equal-weight" from "overweight" at Barclays by equity analyst Raimo Lenschow. The target price is $80. (U.S.) per share.

With files from Bloomberg News