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Air Canada stock has risen by more than 50 per cent in the past five weeks.The Globe and Mail

Inside the Market's roundup of some of today's key analyst actions. This post will be updated with more analyst commentary during the trading day. For breaking analyst actions prior to market open every day, read our Before the Bell morning report.

Shares in Air Canada have skyrocketed by more than 40 per cent since the airline reported strong second-quarter results in early August, and RBC Dominion Securities thinks they've yet to reach their cruising altitude.

In a research note this morning previewing the Canadian air carriers' third-quarter results, RBC analysts led by Walter Spracklin and Steve Arthur raised their price target on Air Canada to $6 from $5.50.

Although WestJet Airlines Ltd.'s stock has been much slower to find lift over the last few months, the analysts also raised their price target on Air Canada's chief domestic rival to $28 from $24. They are less enthusiastic about Chorus Aviation Inc., cutting their price target on that stock to $3.50 from $4. But RBC continues to rate all three airline stocks as "outperform."

"With robust demand, range bound jet fuel prices, and what remains a rational competitive environment, the Canadian airline sector continued to see a positive multiple re-rating in the third quarter," the RBC analysts said.

Air Canada enjoyed some other positive developments during that period, including having its shares added back to the S&P/TSX composite index and the company successfully completing a $1.1-billion bond refinancing that pushed its long-term debt rates lower.

"Clearly, the markets are focusing on and rewarding Air Canada for the significant cost transformation now underway that is set to drive unit cost reductions by over 15 per cent over the next three- to -five-year timeframe," they said. RBC forecasts Air Canada will see annual capacity growth in 2015 of about 6 per cent, with about another 2 per cent reduction in unit costs.

WestJet shares have risen much more modestly, possibly over concerns about the airline bringing on more domestic capacity. But the RBC analysts note that the airline's data for August shows traffic growth of 8.7 per cent so far this year and a smaller-than-estimated decline in fare prices of 0.8 per cent.

For Chorus, RBC reduced its anticipated billable hours for the owner of Jazz Aviation because of Air Canada's recent announcement that they are looking to select a new regional airline to operate certain U.S. routes.

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Credit Suisse analyst David Phung downgraded Pacific Rubiales Energy Corp. to "neutral" from "outperform," citing a number of delays with ramping up production at several fields, including CPE-6, Cajua, Sabanero and Block Z-1.

"There appear to be a number of fields where current production needs to be increased significantly to support current booked reserves," commented Mr. Phung. "While we believe management has the ability to execute, the onus will be to do so, preferably without further meaningful delays."

He reduced his net after royalty production (NAR) forecast for 2013 by 2 per cent and cash flow estimates by 5 per cent, and is also now assuming higher costs. "However, despite a tempered production ramp-up profile, our NAR production and cash flow projections for 2014 have increased by 4 per cent and 1 per cent, respectively, which is primarily attributed to the recent acquisition of Petrominerales," he added.

Target: Mr. Phung cut his price target to $24 (Canadian) from $30. The average price target, according to Bloomberg data, is $29.12.

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A soft housing market and fierce competition have prompted BMO Nesbitt Burns to reduce the expected profits for home improvement retailer Rona Inc.

Analyst Wayne Hood said that the weak Quebec real estate market, losses to U.S. rival Home Depot and clearance markdowns will reduce profits at the company based in Boucherville, Que.

For 2013, expected earnings per share were cut to 52 cents (Canadian) from 60 cents. For 2014, its EPS forecast was reduced to 78 cents from 90 cents.

Rona's shares have risen by 12 per cent this year. The company has been closing stores and cutting costs in a bid to restructure. Last year, it fended off a takeover by Lowe's of the United States and shook up its boardroom to placate angry shareholders.

"We left our [recent] meeting with management more optimistic about the company's longer-term prospects, but our near-term optimism is tempered owing to the magnitude of change that is under way at the company," Mr. Hood wrote in a research note.

Target: Mr. Hood maintained a "market perform" rating with a share price target of $11. The Bloomberg analyst average is $11.53.

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Desjardins Securities analyst Benoît Poirier calls BRP Inc. a "compelling growth play" and maintains a "buy" rating on the maker of Ski Doos, all-terrain vehicles and personal watercraft.

Mr. Poirier expects BRP to boost sales and post higher margins as the U.S. economy improves and its new lower-cost Mexican factory ramps up.

As ATV sales flatten, the North American market for off-road utility vehicles, known as side-by-side vehicles (SSV), is expected to increase by 40 per cent within five years. BRP competes with Polaris, John Deere and Kawasaki in the market for these larger off-road used by farmers, ranchers and recreational riders. Polaris holds 40 per cent of this market. Farmers and ranchers are the biggest buyers (58 per cent of the market) but overall SSV sales rose by 15 per cent last year due to new demand from hunters and other recreational byers.

Mr. Poirier expects BRP to launch an SSV aimed at the utility-recreation market that would sell for less than Polaris's $12,000 (U.S.) model and use BRP's existing engines.

"Assuming market share growth of 15 per cent in the utility recreational market in the long term, we estimate that BRP could generate $90-million (Canadian) in additional revenue," he said.

BRP was spun off by Bombardier Inc. in 2003 and went public earlier this year.

Target: Mr. Poirier maintained a target price of $26.25 (Canadian). The average share price of analysts surveyed by Bloomberg is $31.71.

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Clarus Securities Stephen Kammermayer has begun coverage of Western Energy Services Corp. with a "buy" rating.

The oilfield services company, which has 46 rigs deep-well drill rigs, should gain new business as explorers go to new depths to tap oil and natural gas, Mr. Kammermayer said, noting the Calgary-based company is well positioned to serve price-driven demand for crude drilling.

He added that Western Energy should be "at the center of the development of the Montney, Horn River and Duvernay" fields that will feed serve the planned liquefied natural projects on the West Coast.

"Western's drilling fleet ranks among the deepest and most efficient," Mr. Kammermayer said.

Target: Mr. Kammermayer has a share price target of $10.50 (Canadian). The analyst average is $10.72.

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In other analyst actions today:

Jefferies upgraded Microsoft to "buy" from "hold" and raised its price target to $42 (U.S.) from $33.

Goldman Sachs cut its price target on Molycorp to $5 (U.S.) from $6 and maintained a "neutral" rating.

BMO Nesbitt Burns cut its target on IBM to $215 (U.S.) from $220 and reiterated a "market perform" rating.

Industrial Alliance Securities upgraded Colabor Group to "buy" from "hold" and raised its price target to $5.50 from $5.

Stonecap Securities upgraded SilverCrest Mines to "outperform" from "sector perform" and maintained a $2.50 price target.

RBC Dominion Securities downgraded Superior Energy Services to "sector perform" from "outperform" and cut its price target to $27 (U.S.) from $30.

Evercore Partners raised its price target on Facebook to $60 (U.S.) from $45 and reiterated an "overweight" rating.

Baird initiated National-Oilwell Varco with a "neutral" rating and $82 (U.S.) price target.

Barclays downgraded Merck to "equal weight" from "overweight" and cut its price target to $50 (U.S.) from $60.

Canaccord Genuity downgraded Coronado Biosciences to "hold" from "buy" and cut its price target to $2 (U.S.) from $18.

Goldman Sachs downgraded Teradata to "neutral" from "buy" and its price target was cut to $50 (U.S.) from $74. Credit Suisse downgraded the stock to "neutral" from "outperform" and cut its price target to $45 (U.S.) from $75.

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For more analyst actions, breaking investing news and analysis, follow Darcy Keith on Twitter at @eyeonequities

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