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Those seeking to avoid exposure to market meltdowns by investing in trade volatility for scrutiny.

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

RBC Dominion Securities has upgraded CAP Real Estate Investment Trust to "outperform" from "sector perform" after it recently reported stronger-than-expected third-quarter results.

The REIT's funds from operations, which adds depreciation and amortization expenses to earnings, rose 12 per cent from a year earlier to 43 cents per unit.

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"Operating metrics were impressive across the board," commented RBC analyst Neil Downey. "In short, we've got to give credit where due: the results appear to be a strong validation of CAP REIT's operation and acquisition strategies, and its targeted capex programs," he said.

Upside: Mr. Downey maintained a price target of $27.

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RBC also upgraded Allied Properties Real Estate Investment Trust to "outperform" from "sector perform," applauding the company's low debt levels and growth initiatives in the wake of a recent $115-million equity offering.

"Low leverage, strong liquidity, and a low payout provide the foundation from which value-creation initiatives can be confidently pursued," said RBC's Mr. Downey. "Simultaneously, they serve as protection against unforeseen volatility in capital markets or adverse changes in the operating environment."

Allied Properties has signalled it will focus on advancing internal growth initiatives in 2013, including property redevelopments. "Yet, with $400-million on the books for 2012, we've leaned not to underestimate the ability to unearth acquisitions," he added.

Upside: Mr. Downey raised his price target by $1 to $36 per unit.

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Low interest rates are proving to be a challenge for Canadian Western Bank, although its dividend growth is not in danger, said Desjardins Securities analyst Michael Goldberg.

The bank's 2013 outlook includes "modestly lower" net income and revenue growth, compared with 2012, when it exceeded all of its targets, he wrote in a research note.

"The main reason for the lower objectives is management's outlook on net interest margin. Although we understand the pipeline for new loans remains solid, supported by favourable economic conditions in Western Canada, management is planning for continued net interest margin headwinds as a result of the very low interest rate environment and flat yield curve."

Downside: Mr. Goldberg lowered his price target to $33.50 from $33.75 and rates the stock "buy."

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Lower-grade reserves at First Quantum Minerals Ltd.'s flagship Kansanshi mine in Zambia are a cause for investors to be concerned, Raymond James analyst Alex Terentiew said.

"One of our main concerns with First Quantum has been the long-term quality of its operations, largely from a declining grade perspective, which, in turn, puts pressure on costs," he said. "In our view, First Quantum continues to represent an investment in a steadily growing and diversifying miner, with a track record of successfully executing on project development – a rarity in the mining industry today, which we believe justifies its premium valuation. However, with above average all-in costs, a higher level of political risk with about two-thirds of its value located in Zambia, and an already premium valuation, we see limited potential upside at current levels."

Downside : Mr. Terentiew lowered his price target to $22 from $24 and rates the stock "market perform."

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Husky Energy Ltd.'s management has done a good job of laying out its growth plans and demonstrated its ability to improve on its past issues by meeting targets, Canaccord Genuity analyst Phil Skolnick said.

Over the next three years, Husky is likely to improve its downstream margin capabilities by reducing its Brent crude-based consumption and increasing its access to higher-priced product markets, Mr. Skolnick wrote in a note titled, No longer in the dog house. The company's exposure to Southeast Asia and heavy oil have provided visible growth, and 2014 is expected to be a year when Husky's cash flows support capital spending as well as its dividend, he said.

Upside : Mr. Skolnick raised his rating to "hold" from "sell" and has a $29 price target on the stock.

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

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Investment Editor

Darcy Keith is The Globe and Mail's Investment Editor. He has been a business journalist since 1992 and joined the Report on Business in 2010 from Yahoo! Canada, where he was the senior editor of finance. More

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Sonali Verma is deputy head of audience at the Globe and Mail. She is a business journalist with more than 20 years of experience, mainly in digital media.She was previously the Globe and Mail’s senior editor in charge of audience engagement, overseeing its homepages as well as social media operations. More

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