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Eric Buscemi
New York - http://www.theflyonthewall.com

Eric Buscemi, who has worked for the financial news site Theflyonthewall.com for three years, is the head editor of the company's blog. He has a BA and an MA in English from Queens College.

Analyst upgrades:

• Jefferies upgraded shares of GrafTech (NYSE: GTI) to Buy from Hold as they believe electrode pricing increases should more than offset the increase in raw material costs over the next year. The firm raised their target to $30 from $22.
  
• JP Morgan upgraded Navistar (NYSE: NAV) to Overweight from Neutral following the strong Q3 report and raised outlook.
  
• Goldman added Devon Energy (NYSE: DVN), Quest Software (NASDAQ: QSFT) and Transocean (NYSE: RIG) to the Conviction Buy List.
  
• Monsanto (NYSE: MON) was raised to Outperform from Neutral at Credit Suisse.

• Goldman Sachs downgraded shares of Merrill Lynch (NYSE: MER) to Sell from Neutral and added the stock to the Conviction Sell List as they expect additional write-downs and believe the stock has the highest price to book multiple among the large cap brokers they cover. Goldman lowered their target on MER shares to $22 from $28.50.
  
• UBS cut STMicroelectronics (NYSE: STM) to Sell from Neutral on concerns over excess inventories and the company's joint venture with Ericssono (NASDAQ: ERIC).
  
• B. Riley downgraded Captaris (NASDAQ: CAPA) to Neutral from Buy to reflect the acquisition by Open Text (NASDAQ: OTEX), as they do not expect a materially higher bid to emerge.
  
• Allied Irish Bank (NYS: AIB) was lowered to Hold from Buy at Deutsche Bank.
  
• Astec Industries (NASDAQ: ASTE) was downgraded to Neutral from Buy at Piper.

• Jefferies believes FGX International's (NAS: FGXI) market-leading position in over-the-counter readers should benefit from favorable demographics and a mix shift from more expensive Rx glasses. The firm started shares with a Buy rating and $17 target.
  
• Baird initiated Felcor Lodging (NYSE: FCH) with a Neutral rating and $8 target, citing slowing industry trends and its higher cost balance sheet.
  
• Friedman Billings reinitiated AutoZone (NYSE: AZO) with a Market Perform rating and $131 target. The firm believes the company's slowing earnings growth and likely peak margins make the valuation fair at best at current levels.
  
• Morgan Stanley started Potash (NYSE: POT) and Waters (NYSE: WAT) with Overweight ratings and target of $280 and $81, respectively.
  

Analyst upgrades:

• Oppenheimer upgraded shares of Shanda Interactive (NASDAQ: SNDA) to Outperform from Perform following the company's better-than-expected quarter to reflect its growth acceleration in the casual games platform and margin improvements.
  
• SAIC (NYSE: SAI) was upgraded to Outperform from Market Perform following the solid Q2 report and guidance.
  
• Susquehanna upgraded Zumiez (NASDAQ: ZUMZ) to Positive from Neutral citing positive August comps, revised merchandising, easier comps, and solid financial position.
• Goldman Sachs upgraded Pharm Product Development (NASDAQ: PPDI) and Steel Dynamics (NASDAQ: STLD) to Buy from Neutral.
  
• Novellus (NASDAQ: NVLS) was raised to Overweight from Equal Weight at Morgan Stanley.

• Morgan Stanley downgraded the Semiconductor Capital Equipment sector to In-Line from Attractive citing optimistic expectations for Q4 orders following the recent bounce in stocks. The firm downgraded Lam Research (NASDAQ: LRCX) to Underweight from Overweight and KLA-Tencor (NASDAQ: KLAC) KLAC to Equal Weight from Overweight.

Analyst upgrades:

• Goldman upgraded shares of BP Plc (NYSE: BP) to Buy from Neutral on valuation as they believe the recent pullback provides an attractive entry point.
  
• VF Corp. (NYSE: VFC) was raised to Outperform from Neutral at Credit Suisse citing its acquisition platform and international growth. The company's target was increased to $100 from $88.
  
• Deutsche Bank upgraded shares of Tenet Healthcare (NYSE: THC) to Buy from Hold and increased its target to $8.50 from $7 to reflect increased confidence in the company's ability to beat expectations over the next 12 months and reduce its net debt.
• US Steel (NYSE: X) was raised to Sector Outperformer from Sector Performer at CIBC.
  
• United Technologies (NYSE: UTX) was upgraded at UBS to Buy from Neutral.

Analyst downgrades:

Analyst upgrades:

• RBC Capital upgraded Sciele Pharma (NASDAQ: SCRX) to Sector Perform from Underperform following the acquisition by Shionogi.
  
• Merrill believes Alcoa (NYSE: AA) may pursue an acquisition of Alumina Ltd (NYSE: AWC) following recent share weakness. Shares of Alumina were upgraded to Buy from Underperform.
  
• Stanford upgraded shares of Google (NASDAQ: GOOG) to Buy from Hold after channel checks indicated U.S. search market trends have stabilized as they believe GOOG's market share gains are broadening, Q3 expectations are modest and the valuation is near lows. The firm has a $550 target on the stock.
• Lowe's (NYSE: LOW) was raised to Buy from Neutral at Goldman.
  

• WestLB downgraded shares of Ericsson (NASDAQ: ERIC) to Reduce from Hold as they believe the company's Q3 earnings could miss expectations.
  
• Lehman downgraded Intersil (NASDAQ: ISIL) to Equal Weight from Overweight based PC exposure and market share loss in notebook power. The company's target was lowered to $24 from $29.
• Dean Foods (NYSE: DF) was lowered to Equal Weight from Overweight at Morgan Stanley.
  
• Gilead Sciences (NASDAQ: GILD) was cut to Neutral from Buy at Banc of America.
• JP Morgan lowered Bank of Nova Scotia (NYSE: BNS) to Underperform from Sector Perform.

• Citigroup initiated Eastman Kodak (NYSE: EK) with a Sell rating and $13 target. The firm believes 2008 consensus estimates and guidance are too high given the company's headwinds.
  
• GT Solar (NASDAQ: SOLR) was assumed with a Neutral rating and $16 target at Banc of America. The firm believes the risk/reward is balanced at current levels with no significant new polysilicon opportunity. Shares were also initiated at Thomas Weisel with an Overweight rating and $18 target and at UBS with a Buy rating and $19 target.
• Citigroup initiated Xerox (NYSE: XRX) with a Buy rating and $20 target and Electronics for Imaging (NASDAQ: EFII) with a Hold rating and $18 target.

Analyst upgrades:

• Merriman upgraded shares of Netezza (NYSE: NZ) to Buy from Neutral following the company's solid Q2 results as they believe it is well-positioned for strong operating results heading into 2H09.
  
• JP Morgan raised Cabot (NYS: CBT) to Overweight from Neutral. The firm expects 2009 to be a better year given lower raw material costs and higher contract prices.
  
• JP Morgan also upgraded Royal Ahold (OTC: AHONY) to Overweight from Neutral on valuation.
  
• Liberty International (OTC: LBYIY) was upgraded to Hold from Sell at Deutsche Bank.
  
• BMO Capital upgraded Royal Bank (NYSE: RY) to Market Perform from Underperform and Bank of Montreal (NYSE: BMO) to Outperform from Market Perform.

• Jefferies downgraded shares of Constellation Energy (NYSE: CEG) to Underperform on Hold on concerns the company will come under increasing pressure to issue equity. The firm lowered its target to $60 from $71.
• Thomas Weisel downgraded Williams-Sonoma (NYSE: WSM) to Market Weight from Overweight citing continued macro pressures.
  
• Wachovia has concerns that Kayne Anderson's (NYSE: KED) book value will be pressured by its investment in ProPetro Services, trading losses associated with SemGroup, and negative developments at Quest Midstream. The firm cut shares of Kayne to Market Perform from Outperform.
• Energy Conversion (NASDAQ: ENER) was downgraded to Neutral from Buy at Piper.
  
• Deutsche Bank cut International Paper (NYSE: IP) and Domtar (NYSE: UFS) to Hold from Buy.
  
• H&E Equipment (NASDAQ: HEES) was lowered at Credit Suisse to Neutral from Outperform.

• Morgan Stanley yesterday initiated Elan Corp (NYSE: ELN) with an Overweight rating. The firm sees a low-probability of a Tysabri withdrawal.
  
• ThinkPanmure views On Semiconductor (NASDAQ: ONNN) as a nice turnaround story with opportunities for shares gains in notebooks and consumer gaming platforms. Shares were initiated with a Buy rating and $14 target.
• Petrohawk Energy (NYSE: HK) was assumed with an Outperform rating at Morgan Keegan.
  
• Regency Energy (NASDAQ: RGNC) was initiated at Merrill Lynch with a Neutral rating.

• Goldman upgraded BT Group (NYSE: BT) to Buy from Neutral on valuation and improved earnings visibility.
  
• Soleil upgraded shares of Jo Ann Stores (NYSE: JAS) to Buy from Hold following the company's Q2 upside surprise to reflect strong fundamentals and market share gains. The firm raised Jo Ann's target to $30 from $25.
  
• Amylin Pharma (NASDAQ: AMLN) was upgraded to Buy from Neutral at Merrill Lynch.
  
• Energen (NYSE: EGN) was upgraded to Buy from Neutral at UBS.

• Roth Capital downgraded shares of Warner Chilcott (NASDAQ: WCRX) to Hold from Buy pending patent clarity for the company's lead drug, Loestrin 24 for birth control. The firm lowered their target to $18 from $20.
• JP Morgan cut China Mobile (NYSE: CHL) to Underweight from Overweight as they believe increased competition may limit earnings growth.
  
• Cantor downgraded shares of Cell Genesys (NASDAQ: CEGE) to Hold from Buy following the termination of the VITAL-2 Phase III clinical trial. The firm also lowered their target to $2 from $10.
• Coca-Cola (NYSE: KO) was lowered to Neutral from Outperform at Credit Suisse.
  
• Gilead Sciences (NASDAQ: GILD) was downgraded to Equal Weight from Overweight at Lehman.
  
• Cinemark (NYSE: CNK) was downgraded at BMO Capital to Market Perform from Outperform.

Analyst upgrades:

• Goldman upgraded shares of British Sky Broadcasting (NYSE: BSY) to Buy from Neutral and added the company to the Conviction Buy List as they find the stock oversold at current levels.
  
• Goldman also added Publicis (OTC: PUBGY) to the Conviction Buy List and upgraded shares to Buy from Neutral as they find the stock cheap at current levels.
• Oneok (NYSE: OKE) was upgraded to Overweight from Equal Weight at Lehman.
  
• UBS raised Wimm-Bill-Dann Foods (NYSE: WBD) to Buy from Neutral.

Analyst downgrades:

• Baird downgraded Amylin Pharma (NASDAQ: AMLN) to Neutral from Outperform and said they are incrementally more cautious on the commercial performance of Amylin's Byetta following the yesterday's update. Amylin's target was lowered to $27 from $37. Soleil recommends investors avoid Amylin with the disclosure last night of four additional cases of mortality associated with pancreatitis in patients who were on Byetta. The firm cut shares to Sell from Hold and lowered their target to $20 from $25.
  
• Citigroup downgraded shares of AMR Corp. (NYSE: AMR) to Sell from Hold on valuation as they find the stock expensive following the recent run-up. The firm raised their target to $9 from $6.70 to reflect the drop in crude prices.
  
• J Crew (NYSE: JCG) was downgraded to Hold from Buy at Brean Murray following the weak Q2 report and guidance.
• JMP Securities downgraded Quality Systems (NASDAQ: QSII) to Market Perform from Outperform.
  
• National Grid (NYSE: NGG) was lowered to Equal Weight from Overweight at Lehman.

Analyst initiations:

Analyst upgrades:

• Citigroup upgraded shares of Salesforce.com (NYSE: CRM) to Buy from Hold on valuation following the recent weakness and expects positive seasonality in the second half of 2008.
  
• Gilat Satellite (NASDAQ: GILT) was upgraded to Outperform from Market Perform at William Blair on valuation.
• Cott Corp (NYSE: COT) was raised at UBS to Neutral from Sell.
  
• EOG Resources (NYSE: EOG) was upgraded to Market Perform from Underperform at Bernstein.
  
• Integra LifeSciencues (NASDAQ: IART) was raised to Buy from Hold at Argus.

• Jefferies downgraded shares of Marvell Tech (NASDAQ: MRVL) to Hold from Buy on HDD inventory concerns and share loss at Research in Motion (NASDAQ: RIMM) after checks indicated MRVL likely lost the design for the RIM Javelin to Freescale. The firm lowered their target to $15 from $22.
  
• Oppenheimer downgraded Integrated Device (NASDAQ: IDTI) to Perform from Outperform as they believe the upcoming Intel (NASDAQ: INTC) server memory transition will pressure shares for several quarters.
  
• Broadpoint downgraded shares of Healthaways (NASDAQ: HWAY) to Neutral from Buy as they see few near-term catalysts.

Analyst upgrades:

• Citigroup raised Ann Taylor (NYSE: ANN) to Hold from Sell. The firm upgraded shares following the company's Q2 upside and believes guidance for the second half of 2008 is appropriately conservative.
  
• Jefferies upgraded China Sunergy (NASDAQ: CSUN) based on valuation,and improved liquidity and silicon supply outlook.
  
• Stephens upgraded infoUSA (NASDAQ: IUSA) shares to Overweight from Equal Weight to reflect the stock's valuation, new management, improvements in expense controls and the potential to become a takeover target.
  
• Citigroup raised BB&T (NYSE: BBT) to Buy from Hold.
• Stifel upgraded Leggett & Platt (NYSE: LEG) to Buy from Hold.

• Citigroup downgraded Cablevision (NYSE: CVC) to Sell from Buy as they do not expect the company's structural moves to unlock value.
  
• Wachovia dropped Knight Transportation (NYSE: KNX) to Market Perform from Outperform based on valuation.
  

Analyst upgrades:

• JMP Securities upgraded Salesforce.com (NYSE: CRM) to Outperform from Market Perform based on valuation.
  
• Goldman Sachs upgraded Chico's (NYSE: CHS) to Neutral from Sell based on valuation.
• Blue Coat (NASDAQ: BCSI) was raised to Hold from Sell by Brean Murray.

• UBS dropped Burger King (NYSE: BKC) to Neutral from Buy due to the company's slowing sales trends and commodity pressure.
  
• Las Vegas Sands (NYSE: LVS) was downgraded to Sell from Neutral by Banc of America based on valuation.
  
• Pacific Sunwear (NASDAQ: PSUN) was downgraded to Neutral from Outperform by Baird, which cited the company's Q2 results and reduced guidance.

• UBS initiated O'Reilly (NASDAQ: ORLY) with a Buy because they are positive on its recent CSK Auto acquisition and its valuation.
  
• Baird started Amedisys (NASDAQ: AMED) with an Outperform because they view the recent pullback in the shares as a compelling entry point.

Analyst upgrades:

• William Blair raised Quest Diagnostics (NYSE: DGX) to Outperform from Market Perform. The firm believes that the long-term fundamentals of the clinical laboratories sectors are still strong.
  
• UBS upgraded Massey Energy (NYSE: MEE) to Buy from Neutral on valuation.
  
• ArthroCare (NASDAQ: ARTC) was upgraded to Buy from Hold by Lazard, since the firm expects a small restatement while they believe a large restatement is priced into the shares.
• Arch Coal (NYSE: ACI) was upgraded to Buy from Neutral by UBS.
• Merrill Lynch raised Southern Peru Copper (NYSE: PCU) to Neutral from Underperform.

• Piper downgraded Salesforce.com (NYSE: CRM) to Neutral from Buy to reflect the company's lower than expected deferred Q2 revenue.
• Goldman Sachs removed Amylin Pharmaceutical (NASDAQ: AMLN) from its Conviction Buy List.
  

• Aetna (NYSE: AET) was initiated with a Buy by Banc of America, which believes the company will experience industry-leading member growth.
  
• Banc of America initiated Wellpoint (NYSE: WLP) with a Buy rating, as the firm expects the shares to rebound from near trough valuations.
  
• Wachovia (NYSE: WB) was reinitiated by Friedman Billings with an Underperform rating, as the firm expects the company to incur higher credit losses than the Street expects due to its outsized exposure to residential real estate.
  
• Six Flags (NYSE: SIX) was started with an Above Average rating by Caris.

Analyst upgrades:

• JP Morgan upgraded O'Reilly (NASDAQ: ORLY) to Overweight from Neutral, citing increased demand and CSK acquisition synergies.
  
• Yamana Gold (NYSE: AUY) was raised to Outperform from Sector Perform by RBC Capital, based on valuation and the firm's expectation that gold will rally.
  
• HSBC upgraded KLA-Tencor (NASDAQ: KLAC) to Overweight from Neutral with a $44 target.

• Bernstein dropped DISH Network (NASDAQ: DISH) to Underperform from Market Perform, citing continued weak operations, declining cash flow, and satellite sector headwinds, among other reasons.
  
• Macy's (NYSE: M) was downgraded to Neutral from Buy by Goldman Sachs based on valuation.
  
• Kohl's (NYSE: KSS) was also dropped to Neutral from Buy by Goldman based on valuation.
  
• UBS downgraded Dr Pepper Snapple (NYSE: DPS) to Neutral from Buy based on valuation.

• Salesforce.com (NYSE: CRM) was started with a Buy rating by Kaufman Bros., which believes the core on-demand CRM application market is nowhere close to full penetration.
  
• Caris initiated Eli Lilly (NYSE: LLY) with a Below Average rating, citing the company's Zyprexa and Cymbalta patent expirations.
  
• Leerink Swann assumed coverage of Amgen (NASDAQ: AMGN) with an Outperform, as the firm predicts that the company's denosumab will allow the company to substantially increase its earnings starting in 2010.

Analyst upgrades:

• Baird upgraded Dicks Sporting Goods (NYSE: DKS) to Outperform from Neutral based on valuation.
  
• Home Depot (NYSE: HD) was raised to Market Perform from Underperform by Morgan Keegan.
  
• Southwest Airlines (NYSE: LUV) was upgraded to Outperform from Market Perform by Avondale.

• BMO Capital downgraded Hasbro (NYSE: HAS) to Underperform from Market Perform due to valuation and macro headwinds.
  
• UBS dropped Darden Restaurants (NYSE: DRI) to Neutral from Buy because of slowing casual dining trends.
• Goldman Sachs dropped Affiliated Computer (NYSE: ACS) to Neutral from Buy.
  
• Goldman also downgraded Automatic Data Processing (NYSE: ADP) to Neutral from Buy.

• CIBC initiated Nortel Networks (NYSE: NT) with a Sector Performer rating based on what they see as the company's limited growth and margin prospects.
  
• Needham initiated Juniper (NASDAQ: JNPR) with a Hold rating, citing valuation.
  
• Blockbuster (NYSE: BBI) was initiated with a Hold by Needham, which would like to see if the company's turnaround is sustainable before becoming more constructive on the shares.

Analyst upgrades:

• Stanford raised Fluor (NYSE: FLR) to Hold from Sell primarily due to valuation.
• Citigroup upgraded Cadence Designs (NASDAQ: CDNS) to Buy from Hold because they think the company's cost restructuring initiative and its new CFO will be catalysts for the shares.

• Stephens dropped Ann Taylor (NYSE: ANN) to Equal Weight from Overweight because they no longer view LOFT as a compelling reason to invest in the company.
  
• Citigroup downgraded Hershey (NYSE: HSY) to Hold from Buy on valuation.
  
• KeyBanc dropped Lennox (NYSE: LII) to Hold from Buy on valuation.

• Coverage of Hershey was assumed with a Sell by Stifel, which cited valuation for its rating.
• FARO Technology (NASDAQ: FARO) was initiated by Needham with a Buy rating.
• Leerink Swann resumed coverage of Cardionet (NASDAQ: BEAT) with an Outperform, as the firm predicts that the company's technolgoy will enable it to grow substantially.

Analyst upgrades:

• Merrill upgraded shares of AstraZeneca (NYSE: AZN) to Neutral from Underperform to reflect the company's pipeline momentum and lack of negative catalysts.
  
• Keefe Bruyette upgraded Deutsche Bank (NYSE: DB) to Outperform from Market Perform on valuation as they believe DB should trade at a higher multiple.
• Royal Dutch Shell (NYSE: RDS.A) was raised at HSBC to Overweight from Neutral.
• American International (NYSE: AIG) was upgraded to Buy from Neutral at UBS.

• Merrill cut Novo Nordisk (NYSE: NVO) to Underperform from Neutral as the firm sees better opportunities elsewhere in the sector.
  
• Merriman downgraded Rackable Systems (NASDAQ: RACK) to Neutral from Buy following the company's mixed Q2 results to reflect its customer concentration and fluctuating margins.
• Janus Capital (NYSE: JNS) was downgraded at JP Morgan to Underweight from Neutral.
  
• Fortress (NYSE: FIG) was cut to Sell from Hold at Citigroup.

• UBS believes Apple (NASDAQ: AAPL) has a competitive advantage and their checks indicate new Macs, new iPhone colors and potentially new iPods may come early on in the second half of 2008. The firm initiated shares with a Buy rating and $195 target. UBS also initiated Dell Inc. (NASDAQ: DELL) and Hewlett-Packard (NYSE: HPQ) at Neutral.
• KeyBanc initiated Bed Bath & Beyond (NASDAQ: BBBY) with an Underweight rating and $25 target based on slowing core growth at Bed Bath and likely margin erosion from the ramp in growth at Christmas Tree Shops and buybuy Baby.
• Infineon (NYSE: IFX) was initiated with a Buy rating at Deutsche Bank.