Analyst Upgrades, Downgrades and Initiations: AOL, DOW, KSS, LMT, MAN, MMM, SONC ...

Analyst Downgrades

• Goldman downgraded Lockheed Martin (LMT) to conviction sell from neutral, citing F-35 program challenges, among other reasons. Despite the downgrade, the firm raised its target to $64 from $63.
• Piper downgraded Smith & Nephew (SNN) to neutral from overweight as it favors other names in the space. But the firm raised its target on shares to $57 from $51.
• William Blair downgraded Sonic (SONC) to underperform from market perform, citing the company's weakening sales trends following the Q1 results.
• tw telecom (TWTC) was downgraded to hold from buy at Jefferies.
• Embraer (ERJ) was cut to underweight from neutral at JPMorgan.
• Kansas City Southern (KSU) was downgraded to sell from neutral at UBS.

Analyst Initiations

• Thomas Weisel initiated Atlas America (ATLS) with an overweight rating and $40 target. The firm thinks the company's merger of two subsidiaries and restructuring into a C-corp. in 3Q09 will enable it to invest additional cash in its top North America shale deposit plays.
• FBR Capital started Michael Baker (BKR) with a market perform rating and $45 target.
• AOL (AOL) was assumed at JPMorgan with a neutral rating and $27 target.
• Thomson Reuters (TRI) was started at BofA/Merrill with a buy rating and $39 target.
• Sterne Agee initiated Macy's (M) with a neutral rating and Kohl's (KSS) with a buy rating.
• Transcend Services (TRCR) was initiated with an outperform rating at William Blair.