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Agnico-Eagle Mines Ltd.

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.

Desjardins Securities analyst Michael Parkin upgraded Agnico Eagle Mines Ltd. to "buy" from "hold," after news of its joint bid with Yamana Gold to buy Osisko Mining sparked a plunge in its share price on Wednesday.

"The shares of  Agnico closed down 8.19 per cent yesterday (in Canadian dollar terms), which we believe offers an excellent  entry point and is a primary reason for our upgrade of Agnico to a buy rating from a hold," Mr. Parkin said in a research note.

Before markets opened Wednesday, Osisko announced the friendly acquisition that would see Agnico and Yamana jointly acquire all of Osisko's common shares for $3.9-billion, or $8.15 per Osisko share.

The offer consists of about $1-billion (Canadian) in cash, $2.3-billion in Agnico and Yamana shares and a share in a newly created company that is valued at $575-million.

"We like the deal from the point of view of OSK's shareholders for its implied higher valuation than the current Goldcorp offer and the more simplistic structure compared with the previous Yamana Gold bid," Mr. Parkin said. "We are reviewing our estimates in terms of the implied impact to Agnico, but on a first blush basis, we expect it will be mildly accretive to Agnico's price to net asset value multiple."

"If this deal  is successful, we believe it reduces the need to make further acquisitions to replace the production lost from the Meadowbank mine when it ceases production in 2018."

He also raised his price target to $41 (Canadian) from $40, citing Agnico Eagle's strong first-quarter gold production results. It produced 366,000 of gold in the first quarter, well ahead of his estimates.

Some investors appear to be taking Mr. Parkin's advice; shares in Agnico Eagle opened up more than 3 per cent on the TSX.

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Regardless of the outcome of its pursuit of Osisko Mining Corp., Goldcorp Inc. remains Canaccord Genuity analyst Tony Lesiak's top pick among the North American senior gold producers.

While Goldcorp currently trades at a discount to its peers, Mr. Lesiak believes the miner should trade at a strong premium to the group, "given its sector leading growth, high-quality assets with exceptional exploration upside potential, strong balance sheet and management team."

Mr. Lesiak maintains his "buy" rating and $40 (Canadian) target price. The analyst consensus price target over the next year is $29.90.

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Raymond James analyst Kurt Molnar upgraded Trilogy Energy Corp. to "strong buy" from "outperform" on his belief that the company is going to hit a home run as it uses horizontal wells to develop the Duvernay formation in the Kaybob area of Alberta.

He thinks Duvernay "is about to emerge as an accepted exceptional project" and may be "bigger, and potentially better," than the prolific shale oil and gas production region of Eagle Ford in the U.S.

"For us, a strong buy recommendation is reflective not just of an outstanding return profile but also of a stock pick that is not widely held or considered consensus, such that if we are right, the investor wins on outright return and on alpha relative to their peers," Mr. Molnar said.

Many investors backed away from the name after a noisy operational third quarter in 2014 as well as a new equity offering last October. There has also been ongoing debate about just how good the Duvernay might turn out to be.

"Q413 operational and financial results were much better on a relative basis, but the stock has not tracked performance as strong as its peers this year, we think because of these lingering doubts," he said. "That fact offers a relative value premise for the investor today."

"While we think the near-term operational and financial noise is likely behind us, at the same time we expect the Duvernay at Kaybob to emerge as one of the best and biggest plays in North America with Trilogy having the biggest relative leverage to that premise."

"The equity potential of a project is the product of the capital opportunity, the profit to investment ratio, and the velocity of money (time to payout). We think the Duvernay at Kaybob will be exceptional on all these measures, and that this premise may be widely accepted before year-end 2014. In Trilogy's case, the Duvernay may offer as many as 1,700 future drilling locations with capital costs of $12 million per well (on average) and potential net present values of $20-$35 million per well with payout periods well under a year. This suggests an unrisked asset value potential for Trilogy in the order of $40-billion," he said.

Mr. Molnar hiked its price target to $43 (Canadian) from $37.50.

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The first quarter of 2014 should be a good one for Fairfax Financial Holdings Ltd., but not enough to overcome what he expects to be further weakness in the company's stock price, says CIBC World Markets analyst Paul Holden.

Fairfax will report its 2014 first-quarter results on May 2. Mr. Holden expects investment gains equal to 12 per cent of beginning book value of equity per share on a pre-tax basis. With bond yields down roughly 30 basis points in the first quarter, significant gains on the fixed income portfolio can be expected. He also notes that Fairfax's publicly traded equity holdings did extremely well, returning an estimated 15 per cent for the quarter.

Despite a good start to the year, upside for Fairfax shares is expected to be limited due to soft reinsurance markets and a price to book value multiple at the high end of the historical range.

Mr. Holden maintains his "sector underperformer" rating and $400 (Canadian) price target. The analyst consensus price target over the next year is $408.87.

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Walter Energy Inc.'s announcement that it will close its Canadian operations, including Wolverine and the Brazion coal facilities, beginning in April 2014 is not unexpected, as the assets are not competitive in the current metallurgical coal environment, says RBC Dominion Securities analyst Fraser Phillips.

"Walter Energy offers investors pure metallurgical coal exposure and the highest leverage to metallurgical coal prices in our coverage universe," he said. "We remain constructive on the long-term outlook for metallurgical coal. However, the near-term outlook for metallurgical coal is uncertain and Walter's balance sheet, combined with its relatively high cost structure, particularly at its Canadian operations, results in a high financial risk profile."

Mr. Phillips maintains his "sector perform" rating and $12 (U.S.) target price. The analyst consensus price target over the next year is $11.75, according to Thomson Reuters.

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In other analyst actions:

Mackie Research downgraded Parex Resources to "hold" from "buy" but raised its target to $10.75 (Canadian) from $10.50. At least four other analysts also raised their price target. The median price target is now $10.90, up from 9.50 a month ago.

Desjardins Securities downgraded SunOpta to "sell" from "hold" but hiked its price target to $10.25 (U.S.) from $8.50.

Canaccord Genuity upgraded Midway Gold to "speculative buy" from "hold" and maintained a price target of $1.40 (Canadian).

Canaccord Genuity cut its price target on Canadian Pacific Railway to $178 (Canadian) from $183 and kept a "hold" rating.

HSBC raised its price target on Potash Corp. to $35.50 (U.S.) from $34 and maintained a "neutral" rating.

Pacific Crest upgraded Netflix to "outperform" from "sector perform' with a price target of $500 (U.S.).

Several analysts raised their price targets on SanDisk to $90 (U.S.) from $80 and maintained a "buy" rating.

RBC Dominion Securities upgraded Alcoa to "sector perform" from "underperform" with a price target of $15 (U.S.).

RBC Dominion Securities downgraded Southern Co. to "sector perform" from "outperform" but raised its price target to $46 (U.S.) from $44.

Oppenheimer upgraded Bank of America to "outperform" from "perform" with a price target of $19 (U.S.)

JPMorgan upgraded Boardwalk Pipeline Partners to "overweight" from "underweight" and raised its price target to $18 (U.S.) from $14.

Baird upgraded SolarCity to "outperform" from "neutral" with a price target of $75 (U.S.).

JPMorgan upgraded Gogo to "overweight" from "neutral" with a price target of $28 (U.S.).

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

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