Tuesday's analyst upgrades and downgrades

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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.

While not sounding entirely convinced that BlackBerry Ltd. is poised for a successful turnaround, FBR Capital analyst Scott Thompson upgraded his rating on the struggling Canadian company today on the belief that recent management decisions should limit near-term downside risk in the stock.

He raised his rating to "market perform" from "underperform," with a price target of $10 (U.S.), up from $6.75.

"While we find it probable that a true turnaround could take several additional quarters to take form, we see potential for more upside well before needing to focus on potential downside in shares," Mr. Thompson was quoted by StreetInsider.com as saying.

He cited several recent trends that are favourable for BlackBerry, including a new management team focused on a fairly direct path to profitability, a decisive shift away from the competitive consumer smartphone business into more promising divisions, such as mobile device management, BBM messenger and the licensing the QNX software. He also likes management's plans to rapidly raise cash through such initiatives as selling off real estate assets.

There was also a fresh research note out on BlackBerry today from Raymond James analyst Steven Li, who reiterated a "market perform" rating. He estimates that BlackBerry still needs to cut another 40 per cent in operating expenditures to be able to eek out a profit, assuming limited contribution to earnings from its consumer hardware unit. The company is currently targeting operating expenses of $2-billion a year by the first quarter of fiscal 2015. Mr. Li does not have a price target on the stock.

The average analyst price target is $7.21 (U.S.), according to Thomson Reuters.

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CIBC World Markets analyst Stephanie Price upgraded CGI Group Inc. to "sector outperformer" from "sector performer," believing that market concerns over the company's contract with the U.S. government's so-called Obamacare website are overblown.

Ms. Price notes that the entire U.S. government health-care vertical represents only about 2 per cent of CGI's revenue. Meanwhile, at current levels, CGI is trading at 10.6 times forward earnings, well below European IT services peers at 12.6 times and global IT services peers at 13.5 times.

"Since November 25, CGI's shares have declined about 15 per cent compared to the Bloomberg Software and Services Index returning 4.7 per cent. We see no fundamental changes at the company, which we continue to view as a best-in-class IT services provider," Ms. Price said in a research note.

While CGI's cash flow from operating activities was weak in the fiscal first quarter, it should improve in the second quarter given the timing of "milestone" payments from certain clients. She forecasts fiscal 2014 cash flow of $957-million and is maintaining a $45 (Canadian) price target.

The average analyst price target is $42.53.

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Industrial Alliance Securities initiated coverage on Gildan Activewear Inc. with a "strong buy" rating and $74 (Canadian) price target, encouraged by the company's growth initiatives.

"Gildan has grown to be a leader in Printwear in North America, and is now leveraging a well-established vertically-integrated global manufacturing platform to penetrate international markets, which offer higher growth potential," said analyst Neil Linsdell. "In addition, as Printwear pricing is under pressure, Gildan is also moving focus to the higher-value-add Branded Apparel segment, while still leveraging off its substantial manufacturing base and established retail relationships."

"Gildan's major competitive advantage is its global, low-cost, vertically-integrated manufacturing, which allows responsiveness, consistency and controllable high quality," Mr. Linsdell added.

The average analyst price target is $52.37.

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Raymond James analyst Steve Hansen downgraded Alliance Grain Traders Inc. to "market perform" from "outperform," recommending that investors wait for a pullback in the stock before accumulating more after its recent rally.

Alliance Grain Traders' shares have risen about 28 per cent over the past three months, vastly outperforming the 4.4 per cent rise in the S&P/TSX composite index over the same period.

"We continue to remain positive on the margin and growth opportunities embedded in AGT's strategy aimed at: i) driving significant internal efficiencies across its core pulse processing and merchandising platform (i.e. improved plant utilization/working capital turns);and ii) vertically integrating into the downstream pulse ingredient sector," Mr. Hansen said in a research note.  "We believe this ingredient opportunity, in particular, boasts enormous potential with the ability to fundamentally alter AGT's long-term risk, margin, and earnings growth profile."

"However, despite this optimism, we remain highly cognizant that we are still in the early (risky) innings of this fledgling industry/opportunity, with still very few concrete data points available to support a reliable multi-year forecast. In this context, we will continue to watch for additional 'proof points' that further validate our thesis, and/or a sufficient pullback in AGT shares such that we believe little value is being attributed to the opportunity."

Mr. Hansen maintained a $19.50 (Canadian) price target. The average analyst price target is $18.83.

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Canaccord Genuity analyst Jonathan Dorsheimer upgraded Universal Display Corp. to "hold" from "sell," believing that the near-term risk-reward for the stock is fairly balanced at current trading levels. He raised his price target to $33 (U.S.) from $22.

Universal Display develops organic light emitting diode (OLED) technologies and materials for use in flat panel displays and for other applications.

"Following a week of supply chain meetings in Asia we come away with increased confidence that there are no supply constraints in the OLED space and that Samsung's flagship Galaxy platform will continue to utilize OLED technology," Mr. Dorsheimer said in a research note.

"Our long-term negative call on competitive pressures post 2017 remains, but it is becoming clear this will not play out in UDC's results or investor sentiment in the near-term/intermediate-term," he added.

The average analyst price target is $37.50 (U.S.).

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Labrador Iron Mines Holdings Ltd. is continuing its downward spiral as the company depletes its existing mines and struggles to raise enough cash to develop new operations, noted Desjardins Securities analyst Jackie Przybylowski.

She thinks the company won't be able to raise the required capital to develop new operations, and reiterated a "sell" rating

Target: Ms. Przybylowski cut her price target to 25 cents (Canadian) from 30 cents. The average analyst target is 33 cents.

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In other analyst actions:

Oppenheimer upgraded Lululemon Athletica to "outperform" from "perform" and raised its price target to $63 (U.S.) from $53.

Susquehanna upgraded Intrepid Potash to "neutral" from "negative" and raised its price target to $13 (U.S.) from $10.

CIBC World Markets hiked its price target on Canadian Tire to $114 (Canadian) from $107 and maintained a "sector outperformer" rating.

Industrial Alliance Securities raised its price target on Home Capital to $93 (Canadian) from $85 and maintained a "buy" rating.

Credit Suisse raised its price target on Niko Resources to $3 (Canadian) from $2.50 and maintained a "neutral" rating.

Citigroup initiated coverage on Catamaran with a "neutral" rating and $55 (U.S.) price target.

Barclays downgraded Weight Watchers to "underweight" from "equalweight" and slashed its price target to $15 (U.S.) from $31.

Deutsche Bank upgraded Big Lots to "buy" from "hold" and raised its price target to $33 (U.S.) from $32.

RBC Dominion Securities downgraded Range Resources to "sector perform" from "outperform" and maintained a $90 (U.S.) price target.

Wedbushy downgraded Denny's to "neutral" from "outperform" and cut its price target to $6.75 (U.S.) from $7.25.

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