EYE ON EQUITIES / / STOCKS THAT SHOULD BE ON YOUR RADAR SCREEN

Royal Bank of Canada

(RY-TSX)

Tuesday's close $53.83, up 11 cents

Royal Bank of Canada is our "key call" given its dominance in all business segments, its ability to gain market share, its surplus capital and an 18- to 20-per-cent return on equity, said Peter Rozenberg, an analyst with UBS Securities Canada. It replaces Bank of Nova Scotia.

Upside: The share price target is $68 with forecast 2011 earnings of $5.21 a share.

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Canfor Corp.

(CFP-TSX)

Tuesday's close $8.08, down 1 cent

Canfor Corp. reduced its net debt by 50 per cent from the previous quarter as a result of strong pulp and lumber prices, although lumber has recently dropped in price, said Pierre Lacroix, an analyst with Desjardins Securities.

Downside: The shares are reiterated "hold" and the price target was lowered to $10 from $10.50, although "we would likely consider buying the stock on weakness (below $8)," he said.

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George Weston Ltd.

(WN-TSX)

Tuesday's close $80.59, up $2.08

George Weston Ltd. reported strong second-quarter operating profit as a result of improved productivity, lower

input costs and reduced marketing costs, which helped to offset a competitive pricing environment, said National Bank Financial analyst Jim Durran. It also holds $5-billion in cash for acquisitions.

Upside: The price target was raised by $1 to $87. The share profit is forecast at $4.43 in 2010 and $4.95 in 2011.

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Domtar Corp.

(UFS-NYSE)

Tuesday's close $61.46 U.S., down $1.86

Domtar Corp. has reduced its debt by $453-million (U.S.) bringing its net debt to $732-million or 22 per cent of its capital, said RBC Dominion Securities analyst Paul Quinn.

Upside: Domtar is rated "top pick" as a result of strong pulp and paper markets. The share price target is $90 with forecast profit of $10.06 a share in 2010, up from a previous forecast of $7.31.

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SunOpta Inc.

(STKL-Nasdaq)

Tuesday's close $5.40 U.S., up 34 cents

SunOpta Inc., a natural and organic food processor and distributor, is planning to sell unrelated businesses such as its

Canadian food distribution business in order to improve its balance sheet, said Gregory Badishkanian, an analyst with Citigroup Global Markets.

Upside: Citigroup initiated coverage with a "buy" rating and a share price target of $7.50 (U.S.). The share profit is forecast at 28 cents in 2010 and 36 cents in 2011.

SOURCE: BLOOMBERG