From the Globe and Mail. Could explain at least some of the price spike. Monday, July 21, 2014, 09:44:59 Today's analyst upgrades and downgrades Darcy Keith Inside the Market’s roundup of some of today’s key analyst actions. This file will be updated during the trading day. The time has arrived for optimism in the base metals sector, said Dundee Securities analyst Joseph Gallucci, who expects producers of such metals as copper and nickel to strongly outperform the broader market over the next 12 to 18 months. He raised his price targets on the Canadian mining companies he covers. Base metal stocks are trading at a discount to other TSX sectors on a price-to-earnings and enterprise value-to-EBITDA basis, which is not unusual for the highly cyclical sector. However, Mr. Gallucci believes the three-year bear market for base metals ended in July of last year, when prices bottomed, paving the way for improved valuations to come. He predicts a rotation away from energy stocks - which have been strong performers this year - into base metal producers. While the sector is highly dependent on the global economy, he notes that Chinese gross domestic product appears to be growing at 7.5 per cent, in line with the Chinese government's target. Although skepticism remains, mini-stimulus packages seem to be offsetting weakness in the construction sector and worries over shadow baking defaults in the country. For their part, U.S. and Japanese economies and expanding again. Meanwhile, the supply side is suggesting the worst is over for base metals. With copper and zinc inventories down 70 per cent and 35 per cent, respectively, over the last 12 months, total base metals inventories, excluding aluminum, are back down to 2012 levels. Recent merger and acquisition activity in the sector suggests sentiment is beginning to improve, and oil prices have weakened recently - a positive for miners, he points out. "In an environment where the outlook for the global economy and base metal prices are improving, increased valuations are fundamentally driven," said Mr. Gallucci. "We believe mining stocks will see valuation multiples expand and the sector will outperform the S&P TSX index." Among the stocks seeing the biggest price target hikes by Mr. Gallucci were First Quantum Minerals Ltd., rising to $30 (Canadian) from $25. His other preferred equities in the sector are Lundin Mining Corp., Capstone Mining Corp. and Trevali Mining Corp. Read more at http://www.stockhouse.com/companies/bullboard/t.tv/trevali-mining-corporation#ZlFoXTKYYv1OfcDo.99