MOST NOTEWORTHY:

The IT hardware and the toy Industry top today's extensive list of initiations.

Prudential initiated the IT Hardware sector with an Unfavorable rating. The firm expects earnings below consensus after checks indicated slower corporate IT spending. Within the sector, Prudential initiated Dell (DELL) and Lexmark (LXK) with Overweight ratings. They initiated Apple Computer (AAPL) with a Neutral and a $74 target. The firm cited valuation, a slowing media market and increased competition from Microsoft (MSFT).

In addition, Prudential initiated Hewlett-Packard (HPQ), Seagate (STX), Sun Microsystems (SUNW) and Western Digital (WDC) with Underweight ratings.

Elsewhere, BMO Capital Markets initiated the toy industry with an Outperform rating on the belief the industry is positioned for a turnaround. They started Mattel (MAT) and RC2 CORP (RCRC) with an Outperform rating, Jakks Pacific (JAKK), Hasbro (HAS) and Leapfrog Enterprises (LF) with Market Perform ratings and Mega Brands (MB) with an Underperform rating.

OTHER INITIATIONS:

• Safeco (SAFC) was initiated with an Add and $70 target at Calyon. The firm is positive on management's focus on restoring relationships with independent agents.
• BB&T initiated Diana Shipping (DSX) with a Buy and $16 target. The firm is positive on Diana's growth story and improving fundamentals.
• And finally, American Technology initiated Silicon Image (SIMG) with a Buy and $17 target, believing consensus estimates for 2007 are too conservative as investors have underestimated the acceleration in HDMI adoption going forward.

Analyst summaries provided by TheFlyOnTheWall.com (subscription required).