Wednesday'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.

National Bank Financial analyst Kyle Preston downgraded Encana Corp. to "sector perform" from "outperform" while slicing his price target to $21 (U.S.) from $22.50.

The action follows the natural gas giant this morning outlining its spending plans for 2014. New CEO Doug Suttles is planning to expand liquids production by 30 per cent next year as Encana focuses capital on regions rich in high-value gas liquids and oil. Its production for natural gas, which continues to be in the doldrums, is expected to decrease. (Read more on Encana's plans, and the risks they entail, in this Streetwise post from  Tim Kiladze.)

So far today, most other analysts reaffirmed their ratings and targets on Encana following the announcement. The average price target among analysts is now $21.01, according to Bloomberg data. Eight analysts rate the company as a buy, 16 as a hold, and three as a sell.

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A new analyst at Citigroup has assumed coverage of BlackBerry Ltd. - and he's taking a decidedly more bearish view on the stock.

Ehud Gelblum is now responsible for BlackBerry at the bank, taking over from Jim Suva, whose coverage area has reportedly shifted to IT supply chain firms and IT hardware.

Mr. Gelblum slapped BlackBerry with a "sell" rating (Mr. Suva had rated it "neutral) and came up with a $4 (U.S.) price target. Mr. Suva had a $7 target.

He thinks that BlackBerry "remains challenged" as a going concern and would be worth more if the company was broken up - which does not appear to be the path favoured by management right now.

He also believes headwinds in the mobile sector are picking up speed for BlackBerry, given indications that Windows Mobile is becoming more established as a third ecosystem behind Android and Apple's iOS.

"We believe refocusing its business on areas where Blackberry has been losing share as the market has shifted away from it is likely to lead to substantial operating losses going forward as management attempts to put the company on strong footing in a shifting environment," Mr. Gelblum was quoted by Barron's as saying in a research note.

"Oddly enough, simply shutting the business is also not likely to add value as the separation costs and purchase commitments that we estimate would be incurred could exceed the company's cash balance and would likely require substantial renegotiating of agreements with manufacturers. In short, we see no clear-cut strategy, simple or otherwise, to help BBRY out of the strategic box it finds itself in and believe wind-down costs could come close to wiping out a great deal of the current cash balance on which the current valuation is based while the ongoing cash flow from the legacy Services business should dry up quickly," he said.

The research note was issued Tuesday afternoon in a day of volatile trading for BlackBerry. It closed higher, recovering from a decade-low of $5.44 (U.S.). Today, it was trading up 0.5 per cent by late afternoon.

The average analyst target is $7.18 (U.S.), according to Thomson Reuters.

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Nielsen Holdings NV is a big dividend payer in the making, said Credit Suisse analyst Hamzah Mazari as he initiated coverage on the stock with an "outperform" rating and $52 (U.S.) price target.

Mr. Mazari thinks Nielsen, which provides audience analytics on what consumers watch, has a cross platform opportunity that's underappreciated.

"A key trend of which Nielsen is likely a big beneficiary is creating measurement tools around online and mobile by using its competitive advantage in TV ratings and its Buy segment footprint," Mr. Mazari said in a research note. "In our analysis, we air on the side of conservatism and assume about 3 per cent penetration in an online market size of about $60-billion in five years which alone implies over $6/share of upside potential to the current price."

Once Nielsen pays off some of its debt, he thinks the company will become a big dividend payer "based on its recurring revenue base (90 per cent+ retention rates), asset light model and limited cyclicality (core TV segment grows 4-5 per cent on average across the cycle)."

"Assuming a decent sized payout ratio, our 2016 free cash flow projections would imply a 5 per cent yield in today's dollars," he said.

The average analyst target is $42.40 (U.S.), according to Thomson Reuters.

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Chorus Aviation Inc.'s move to hike its quarterly dividend by 50 per cent in the wake of winning an arbitration ruling involving partner Air Canada came as a surprise to CIBC World Markets analyst Kevin Chiang.

"We had expected the company to move further along in laying out its turnaround strategy and creating a new framework with Air Canada before announcing any increase," he commented.

But he raised his price target to $4.50 (Canadian) from $3.75, believing the dividend hike shows management has confidence in its future cash flows and that recent cost-cutting efforts have been beneficial.

He maintained a "sector performer" rating. The average analyst target is $3.36, according to Thomson Reuters.

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Canaccord Genuity analyst Jeffrey Frelick downgraded Laboratory Corp. of America Holdings to "hold" after the lab provider gave a dour outlook for 2014.

LabCorp said it expects adjusted earnings per share of $6.50 next year, far below the Street's expectation of $7.52. It also lowered the low end of its 2013 earnings per share guidance by a nickel to a range of $6.90 to $7.05.

"Not unlike recent commentary, LH called out utilization pressures, reimbursement pressures, ACA (Affordable Care Act) uncertainty and an uptick in high-deductible health plans," commented Mr. Frelick. "At first glance, the guidance looks excessively pessimistic relative to reality. Given LH's position as the low-cost lab provider, we thought they could endure the market challenges the best, but we miscalculated."

He cut his price target to $91 (U.S.) from $115. The average analyst target is $104.76, according to Thomson Reuters.

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In other analyst actions:

Industrial Alliance slashed its price target on Zenn Motor to $4 (Canadian) from $11 but reiterated a "speculative buy" rating.

Industrial Alliance downgraded Orbit Garant Drilling to "hold" from "buy" and kept a $1.30 (Canadian) price target.

Topeka Capital raised its price target on Google to $1,313 (U.S.) - believed to be the highest target on the Street - from $1,100. It maintained a "buy" rating and called Google a "must own stock for 2014.

Wells Fargo upgraded Groupon to "outperform" from "market perform." It raised its valuation range to $13 (U.S.) to $14 from $5 to $6.

JPMorgan upgraded American Airlines to "overweight" from "neutral" with a price target of $37 (U.S.) and added the stock to its "focus list."

Nomura Securities upgraded 3M to "buy" from "neutral" and raised its price target to $150 (U.S.) from $128.

Goldman Sachs upgraded FirstEnergy to "neutral" from "sell" and maintained a $33 (U.S.) price target.

Goldman Sachs initiated coverage on Cott with a "neutral" rating and $9.50 (U.S.) price target.

Raymond James raised its price target on West Fraser Timber to $115 (Canadian) from $110 and maintained an "outperform" rating.

Deutsche Bank upgraded ITC Holdings to "buy" from "hold" and raised its price target to $104 (U.S.) from $95.

Citibank initiated coverage on Cisco with a "sell" rating and $18 (U.S.) price target.

Citibank raised its price target on Netflix to $390 (U.S.) from $355 and maintained a "neutral" rating.

Nomura raised its price target on Freeport-McMoRan to $45 (U.S.) from $38 and maintained a "buy" rating.

BMO Nesbitt Burns raised its price target on Southwestern Energy to $45 (U.S.) from $37 and reiterated a "market perform" rating.

BMO Nesbitt Burns cut its price target on Entergy to $63 (U.S.) from $69 and maintained a "market perform" rating.

CIBC World Markets initiated coverage on Newalta with a "sector outperformer" rating and $18.25 (Canadian) price target.

Credit Suisse initiated coverage on Gartner with an "outperform" rating and $77 (U.S.) price target.

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