Analyst downgrades:

• FBR Capital downgraded Smith International (NYSE: SII) to Market Perform from Outperform after it learned the company lost its contract with Petrobras (NYSE: PBR) in Brazil. FBR expects Smith to disappoint expectations due to market share loss in Brazil and lowered its target on shares to $38 from $50.
• Oppenheimer downgraded Novavax (NASDAQ: NVAX) to Perform from Outperform on valuation as it believes the promise of the company's VLP technology is priced in at current levels.
• Citigroup downgraded Rockwell Automation (NYSE: ROK) to Perform from Outperform on valuation and maintains a $32 price target on shares. The firm coupled this downgrade with an upgrade of Cooper Industries (NYSE: CBE) to Buy from Hold.
• D.R. Horton (NYSE: DHI) was downgraded to Sell from Neutral at UBS.
• Valspar (NYSE: VAL) was downgraded to Buy from Conviction Buy at Goldman.
• Hologic (NASDAQ: HOLX) was downgraded to Hold from Speculative Buy at Canaccord.

Analyst initiations:

• Jefferies believes Fossil's (NASDAQ: FOSL) business model is well diversified and expects increased U.S. retail and international penetration to raise margins. The firm started shares with a Buy rating and $32 target.
• Genzyme (NASDAQ: GENZ) and Gilead Sciences (NASDAQ: GILD) were reinstated with Buy ratings at BofA/Merrill.
• Thomas Weisel initiated BPZ Resources (AMEX: BPZ) with an Overweight rating and $10.50 target. The firm thinks the stock's valuation is attractive, while the Albacora field is a potential "game changer" for the company that can more than triple its 2P oil reserves base.
• Rowan Companies (NYSE: RDC) was initiated with a Market Perform rating at BMO Capital.
• Anixter (NYSE: AXE) was initiated with an Outperform rating at Morgan Keegan.
• Abercrombie & Fitch (NYSE: ANF) was initiated with a Market Perform rating at Raymond James.