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A Potash Corp. operation.

Inside the Market's roundup of some of today's key analyst actions.

Investors should expect an acceleration in Potash Corp. of Saskatchewan Inc.'s free cash flow over the next couple of years, paving the way for "momentous" increases in its dividend and share price, said Cantor Fitzgerald analyst Peter Prattas.

On Monday, rival potash producer Mosaic Co. announced it will be deferring some expansion projects, further easing concerns of a potash glut in coming years, he noted. Meanwhile, Potash Corp. has released data showing still strong potash sales month-over-month, with inventories declining 6 per cent.

"The stock didn't track last year's rally among most fertilizer stocks, nor this year's flight to quality, and is due to outperform," he said.

He notes that despite widespread expectations of a decline in prices this year, agricultural commodities remain firm versus 2012. Soybeans are flat year-to-date, while corn is off only 6 per cent - pointing to still healthy levels of fertilizer demand.

Target: Mr. Prattas reiterated a "buy" rating and $50 (U.S.) price target. The average price target is $46.30, according to Bloomberg data.

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Canadian Tire Corp.'s announcement that it will create a real estate investment trust has begun to focus investor attention on the underlying value of the company, propelling the share price out of its recent trading range, commented RBC Dominion Securities analyst Irene Nattel.

Ms. Nattel said her preliminary analysis of the combined value of the proposed REIT and the company's retail and financial services businesses suggests an uptick in the stock price is warranted.

"The obvious benefit of creating and IPO'ing a REIT should be, 1) valuation bump from transferring assets related earnings into tax advantaged and premium valuation structure, 2) a more flexible financial structure, particularly for CTC which has a hybrid Retail/Financial services balance sheet, and 3) potential incremental share repurchase with cash proceeds from IPO," Ms. Nattel said in a research note. "We would also assume that like Loblaw, CTC also sees operating benefits, including lower cost of capital, on a go-forward basis."

Target: Ms. Nattel raised her price target by $4 to $90 and reiterated an "outperform" rating. The average price target is $91.50.

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Another dividend cut could be coming to IBI Group Inc., warns CIBC World Markets analyst Paul Lechem.

The company reported much weaker-than-expected first-quarter earnings and remains in a financially stressed situation, largely due to a weak balance sheet because of "too many acquisitions, too high dividends and poor working capital management," said Mr. Lechem.

"IBI cut its dividend by 50 per cent in December in an effort to conserve cash," he noted. "Q1 results show that there is still cause for concern, given negative operating cash flow. Furthermore, the company must plan for $46-million in convertible debentures maturing on Dec. 31, 2014."

Target: Mr. Lechem cut his price target to $4 from $7.50 and reiterated a "sector performer" rating. The average price target is $3.78.

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Capstone Mining Corp. will become a stable, free cash flow producer once it closes its acquisition of BHP Billiton's Pinto Valley mine in Arizona later this year, said RBC Dominion Securities analyst Patrick Morton, who upgraded the stock to "outperform."

After the mine comes under Capstone's umbrella, the company should be able to produce at a steady rate of 250 million pounds per year of copper equivalent, comparable to much larger peers such as Lundin Mining Corp. and HudBay Minerals Inc. The company should also have below average technical and capital risk over the next three years.

"Once Pinto Valley's operating parameters and a mine plan are made public late this year, we believe the market will attribute greater value to the mine," Mr. Morton said. "We believe Capstone will emerge in 2014 as one of the few significant mid-cap copper producers."

Target: Mr. Morton, who previously rated the stock "sector perform," raised his price target by 25 cents to $3.25. The average price target is $3.51.

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Raymond James analyst Kristopher Zack has turned more bullish on Enerplus Corp., noting that the company is on track operationally and its emerging liquids rich gas portfolio could help boost the company's fortunes.

He upgraded Enerplus to "outperform" from "market perform," commenting that the company's 7 per cent yield "is in good shape" and debt levels are manageable as the company grows its U.S. production base.

Target: Mr. Zack raised his price target to $17 from $16. The average target is $17.64.

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

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