Analyst upgrades, downgrades and initiations: ARO, AZN, BNI, BRCD, HBC, MRK, TIF ...

Analyst downgrades:

• ThinkEquity views the Hewlett-Packard (HPQ) deal for 3Com (COMS) as a setback for Brocade (BRCD) given its OEM partnership with Hewlett and increased competition from the combined entity. The analyst downgraded Brocade to hold from buy and added that future share gains for Brocade in the LAN/Ethernet business will be more difficult. Shares were also cut to neutral from overweight at Piper Jaffray, as it believes the company's OEM strategy is not working as planned and that Hewlett-Packard's acquisition of 3Com eliminates a sales opportunity. Piper also viewed Hewlett-Packard as Brocade's highest-probability suitor, and believes that potential deal is off the table now. The firm lowered its target on Brocade shares to $9 from $10.
• Stephens downgraded Flowers Foods (FLO) to equal weight from overweight following the company's Q3 results on concerns that promotions in the baking category will limit sales and earnings growth. The firm lowered its target on shares to $25 from $31.
• Burlington Northern (BNI) was downgraded to underweight from equal weight at Barclays. The firm raised its target to $100 from $90.
• RHI Entertainment (RHIE) was downgraded to underweight from market weight at Thomas Weisel.
• Nu Skin Enterprises (NUS) was downgraded to hold from buy at Stifel Nicolaus.

Analyst initiations:

• Leerink started Dendreon (DNDN) with an outperform rating and $40 target. The firm expects Dendreon to receive FDA approval of PROVENGE for prostate cancer and that recent survey results support a favorable commercial outlook.
• Jesup & Lamont initiated Tiffany & Co. (TIF) with a hold rating and prefers waiting for a more attractive entry point into Tiffany shares.
• Thomas Weisel initiated hhgregg (HGG) with an overweight rating and $23 target. The firm believes the company is poised to capture higher margin, high-end traffic in the appliances and flat panel TV markets. The firm thinks the company will have long-term competitive threats but it believes the valuation is compelling for a one-year time frame.
• Barclays initiated Bayer (BAYRY), GlaxoSmithKline (GSK) and AstraZeneca (AZN) with equal weight ratings and Sanofi-Aventis (SNY) with an overweight rating.
• Merck (MRK) was initiated with an equal weight rating and $34 target at Morgan Stanley.
• The Buckle (BKE) was started at Goldman with a sell rating and $27 target.