Although UBS Securities Canada Inc. has trimmed its earnings outlook for TSX companies, it maintains its forecast for the TSX index to hit the 15,000 mark in a year’s time.

UBS is paring its earnings estimates by 3%-4% for 2007 and 2008, the firm said in a report released Friday “While investors have understandably shifted focus to liquidity risks, the underlying earnings outlook for the TSX has been pared by 3%-4% relative to three months ago,” it said. This still leaves estimated growth rates at 9% for 2007 and 16% for 2008, it adds.

The sectors with notable cuts to both 2007 and 2008 estimates were materials (-13%/-6%), energy (-3%/-9%), telecom (-5%/-6%) and industrials (-5%/-2%). On the flip side, technology (+2%/+5%) and consumer staples (+2%/+2%) had upward revisions to both years, it says. “The resources were hurt by the stronger Canadian dollar, but the higher commodity prices that caused this should be reflected in improved earnings later this year,” it notes.

Indeed, UBS’s call for high commodity prices means its overall TSX estimates are roughly 3%-8% above the consensus for 2007 and 2008, respectively, it adds.

At its current level of about 13,757, UBS says that TSX is about 8% above its estimate of fair value. Yet, it still expects the index to head higher in the coming year. “The rapid book value growth leads to strong growth in our fair value estimate, and so a target of 15,000 in one year’s time, which can be achieved with 15% earnings growth and a 5.5% corporate bond yield,” it concludes.