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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. For breaking analyst actions prior to market open every day, read our Before the Bell morning report.
Citing concerns over its debt load, TD Securities analyst Aaron Bilkoski downgraded Parallel Energy Trust to "hold" from "buy" after the company revealed third-quarter results.
"We remain of the view that Parallel's asset base is well-adapted to the high-yield business model," Mr. Bilkoski said in a research note. "However, in our view, financing decisions made in the past will become of increasing concern as 1) the large interest payments limit Parallel's ability to direct capital to maintain production and, 2) the forward looking market begins to question how Parallel will refinance its convertible debenture maturing in mid-2017."
Mr. Bilkoski believes Parallel will be able to largely offset its production declines with new growth and maintain its dividend. "However, we are now taking a more cautious stance given uncertainty over the longer-term outlook regarding its balance sheet," he said.
Mr. Bilkoski cut his price target to $4.25 (Canadian) from $4.75. The average analyst target is $4.65, according to Thomson Reuters data.
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Shares in Leapfrog Enterprises Inc. have been oversold, making for a compelling risk/reward opportunity for investors in the near term, said BMO Nesbitt Burns analyst Gerrick Johnson in upgrading his rating to "outperform" from "market perform."
Leapfrog, which develops educational entertainment for children, announced last week that its fourth-quarter sales and earnings would be below prior forecasts, leading to a further slide in its share price.
"But with recent share price declines exceeding 30 per cent, several new ratings downgrades, and a huge short position (32 per cent of float), we think this bad news is more than fully discounted by the current share price," he said.
He also thinks there is much to like about Leapfrog in the longer term, including a well-known and respected brand name and opportunities to expand its educational entertainment content business.
Mr. Johnson maintained a $10 (U.S.) price target, which is also the average Street target.
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RBC Dominion Securities analyst Paul Treiber upgraded Mitel Networks Corp. after the communication services provider announced a merger with Aastra Technologies Ltd. that creates a new cloud computing firm.
The transaction comes to $6.52 in cash and 3.6 Mitel shares for every Aastra share – roughly $31.96 an Aastra share. That's a 13-per-cent premium over the company's share price at the end of last week.
"Following Mitel's planned merger with Aastra, we are upgrading the shares to outperform on: 1) expected realization of synergies on the acquired business; 2) complementary businesses and valuation reduce acquisition-related risks; and 3) reduced leverage and strong free cash flow," Mr. Treiber said.
He raised his price target to $8.50 (U.S.) from $5. The average target is $5.54.
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Jackie Przybylowski of Desjardins Securities downgraded Copper Mountain Mining Corp. to "hold" from "buy" after the company issued $30-million (Canadian) worth of new shares Monday.
The funds raised will be used to finance a second crusher unit, though it came as a surprise to Ms. Przybylowski, who also reduced her price target to $2.25 from $2.75.
"The equity issue represents significant dilution and was unexpected, as management had previously indicated the unit would be funded through debt," she said.
Copper prices have taken in a hit in recent years and the company's shares have also dropped since their all-time high in 2011.
The average target among analysts is $2.92.
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Alaris Royalty Corp. is a company to own long term, according to RBC Dominion Securities analyst Anthony Jin as he reiterated his "outperform" rating.
Mr. Jin raised his price target to $44 (Canadian) from $37, citing the private equity investment firm's stability and the upward trajectory of its dividends. That growth has been reflected in the company's stock: shares have more than tripled in the past five years.
The average target among analysts is $37.26.
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In other analyst actions:
Desjardins Securities downgraded Arsenal Energy to "sell" from "hold" and maintained a $6 (Canadian) price target.
Cowen downgraded FedEx Corp. to "market perform" from "outperform" but raised its price target to $136 (U.S.) from $117.
UBS downgraded Costco to "neutral" from "buy" with an unchanged price target of $124 (U.S.).
UBS downgraded Gogo to "neutral" from "buy" but raised its price target to $26 (U.S.) from $20.
Jefferies initiated coverage on Qualcomm Inc. with a "buy" rating and a price target of $80 (U.S.).
Baird initiated coverage on Twitter Inc. with a "neutral" rating and $48 (U.S.) price target. Susquehanna started coverage with a "neutral" rating and $38 target.
Industrial Alliance raised its price target on CCL Industrial Inc. to $95 (Canadian) from $83 and maintained a "buy" rating.
Canaccord Genuity downgraded Hologic to "hold" and cut its price target to $19 (U.S.) BMO Nesbitt Burns downgraded Timmins Gold to "market perform" and cut its price target to $1.50 (Canadian) from $2.75.
TD Securities downgraded Parallel Energy Trust to "hold" from "buy" and cut its price target to $4.25 (Canadian) from $4.75.
Beacon Securities initiated coverage on Detour Gold with a "buy" rating and $10.50 price target.
Credit Suisse downgraded Clean Harbors to "neutral" from "outperform" with a price target of $62 (U.S.).
Desjardins Securities raised its price target on Sears Canada to $15 (Canadian) from $14.50 and maintained a "hold" rating.
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For more analyst actions, breaking investing news and analysis, follow Darcy Keith on Twitter at @eyeonequities