Analyst Upgrades

• Brinker (EAT) to buy from neutral at UBS.
• Starbucks (SBUX) to overweight from equal weight at Morgan Stanley.
• Paccar (PCAR) to overweight from neutral at JPMorgan.
• CA Technologies (CA) to outperform from perform at Oppenheimer.
• PPL Corp. (PPL) to overweight from equal weight at Barclays.
• ConocoPhillips (COP) to hold from sell at Citigroup.
• First Defiance (FDEF) to outperform from market perform at Keefe Bruyette.
• MasTec (MTZ) to outperform from neutral at Credit Suisse.
• Amdocs (DOX) to neutral from underperform at BofA/Merrill.

Analyst Upgrades

• Abercrombie & Fitch (ANF) to positive from neutral at Susquehanna.
• tw telecom (TWTC) to outperform from neutral at Cowen.
• Agree Realty (ADC) to buy from neutral at Janney Capital.
• Millicom (MICC) to buy from neutral at Nomura.
• BioMed Realty (BMR) to outperform from market perform at FBR Capital.
• Realty Income (O) to buy from neutral at BofA/Merrill.

CA Technologies (CA) - option chain) stock is trading lower today after the company announced Q3 2011 earnings results after the market close yesterday. CA reported EPS of 0.39, up from 0.34 in the same quarter last year but well below the consensus target of 0.49. Also, the company warned of weak renewals. If you think this stock won't be rising too far in the coming months, then it could be a good time to look at a bearish hedged play on CA.

This morning, CA opened at $24.19. So far today the stock has hit a high of $24.40 and a low of $23.18. As of 12:40, CA is trading at $23.32, down $2.04 (-8.0%). The chart for CA looks neutral and S&P gives CA a neutral 3 STARS (out of 5) hold ranking.

Analyst Upgrades

• BMO Capital upgraded Procter & Gamble (PG) to outperform from market perform as it views P&G's valuation as attractive and expects growth to pick up in the March quarter. The firm has a $74 price target for shares.
• Goldman upgraded Tupperware (TUP) to buy from neutral and raised its target for shares to $60 from $48.
• Stifel Nicolaus upgraded Scansource (SCSC) to buy from hold. The firm believes that the company's growth is poised to accelerate, allowing the stock's multiple to expand or even rise slightly. The firm has a $43 target for shares.
• CA Technologies (CA) was upgraded to outperform from sector perform at RBC Capital.
• Brady (BRC) was upgraded to market perform from underperform at BMO Capital.
• Lukoil (LUKOY) was upgraded to overweight from neutral at JPMorgan.

Option traders appear to be setting up for a bullish move on CA Technologies (CA). Traders plowed into 4,799 new call option contracts -- 13.87 times the average volume -- on the stock on Thursday. And we know that traders were eager to get into this trade because 98% of the trades came in on the "ask" price.

CA Technologies closed Thursday at $18.13. The stock has dropped 7.64% during the past month, but it is currently sitting at support just above $18.

CA Inc. (CA), a software company that provides IT solutions, has traded in a narrow range over the past twelve months. The 52-week low is $16.12; the 52-week high is $24.15. On Friday, the stock closed down $1.37, or over 6%, to $20.51. Volume was way, way above normal. What's going on?

As you may have guessed, you can blame an earnings report for the sell-off. Adjusted earnings of 34 cents per share was two pennies below analyst expectations. Also, Bloomberg BusinessWeek states that guidance for next fiscal year's top line was slightly below estimates, and that the chief operating officer was leaving the business.

While business software developer CA (CA) has made progress in restructuring its business, there are still hick-ups. After all, the recovery has been fairly muted and the company also has many financial services customers.

So today, CA gave a warning to investors. Full-year earnings will likely be at the low-end of the forecast of $1.60 to $1.71 per share. The consensus was for $1.69 per share.

Monday, May 19

• Lowe's Companies (NYSE: LOW) to report Q1 earnings; conference call scheduled for 9:00am.
• Campbell Soup Company (NYSE: CPB) to report Q3 earnings; Conference call scheduled for 10:00am.

Tuesday, May 20

• Senate Judiciary Committee Hearing on Global Internet Freedom & Corporate Responsibilty at 10:00am. Appearing: Google, Inc. (NASDAQ: GOOG), Cisco Systems, Inc. (NASDAQ: CSCO) and Yahoo! Inc. (NASDAQ: YHOO).
• Medtronic, Inc. (NYSE: MDT) to report Q4 earnings; conference call scheduled for 8:00am.
• Hewlett-Packard Company (NYSE: HPQ) to report Q2 earnings; conference call scheduled for 5:00pm.

Compuware Corporation (NASDAQ: CPWR) provides software designed to enhance the performance of business computer systems. Products include program suites that test system performance, manage enterprise files and focus application development. Compuware also offers consulting, systems integration, custom programming, maintenance and support services. Ninety percent of the Fortune 100 companies are clients. CA Inc (NYSE: CA) and IBM (NYSE: IBM) are competitors.

The company pleased investors last week, when it guided Q4 EPS to 23 cents and revenues to $337 million. Analysts had been looking for 19 cents and $319.84 million.

CA, Inc. (NYSE: CA) provides information technology (IT) management software. Its programs manage network databases, applications, storage functions and security options, operating across distributed computing environments. The firm also provides technical support and consulting services. CA has strategic relationships with Google (NASDAQ: GOOG), IBM (NYSE: IBM), Microsoft (NASDAQ: MSFT) and other IT market leaders. It is one of the world's largest software companies.

CA surprised the Street late last month, with fiscal Q3 EPS of 36 cents and revenues of $1.1 billion. Analysts had been expecting 25 cents and $1.04 billion. Management also guided FY08 EPS to $1.22-$1.26 ($1.09 consensus) and FY08 revenues to $4.25-$4.28 billion ($4.19B consensus).

Callaway Golf (NYSE: ELY) is scheduled to release Q4 EPS this afternoon.

ELY will hold an analyst meeting on February 7.

ELY overall option implied volatility of 50 is above its 26-week average of 41 according to Track Data, suggesting larger risk.

CA, Inc. (NYSE: CA), an information technology management software company, closed at $22.30 Wednesday.

Stanford Group initiated CA with a Hold rating. Stanford says: "In our opinion CA has suffered from three main problems in recent years; growth, restructuring-related disruptions, and a complex financial model that hindered visibility of its financial performance."

CA is expected to report Q3 EPS after the market close tonight. CA February option implied volatility of 43 is above its 26-week average of 28 according to Track Data, suggesting larger price risks.

Option Update is provided by Stock Specialist Paul Foster of theflyonthewall.com

It's as if M&A is in overdrive for the software space. SAP AG (ADR) (NYSE: SAP) agreed to pay $6.7 billion for Business Objects S.A. (ADR) (Nasdaq: BOBJ). And, of course, today Oracle Corporation (Nasdaq: ORCL) announced a $6.6 bid for BEA Systems, Inc. (Nasdaq: BEAS).

What's going on here? Well, I had a chance to interview an expert on the topic: David O'Connell, who is a senior analyst at Nucleus Research.

Q: What's your take on the recent activity?

A: "What's driving this is that SAP and Oracle both want to be the biggest kid on the block. They each want to be the only vendor that companies turn to when they buy software. Oracle buys Hyperion, so SAP buys Business Objects. Oracle may buy BEA, so maybe SAP will buy a vendor with a strong integration or SOA offering. It's always hard to tell who's winning. The good news is that end users can be the winners if they say to their account representative, 'hey, I'm buying almost all my software from you, so prices have to come down, and deployments have to be flawless, or I'll ruin your holiday by taking all that business to your rival.'"

Q: Why now?

A: "Because SAP and Oracle both need new customers. The market for selling major applications, especially ERP, to the largest companies is pretty saturated. So SAP and Oracle need new ways to grow revenues. They are starting to go head to head with one another in the market for smaller companies, where Microsoft (Nasdaq: MSFT) dominates. Smaller companies have smaller IT staffs and less time to dedicate to IT. So SAP and Oracle want to court these customers with full product suites, the benefit of one stop shopping, and the alleged benefit of integration among their acquired applications. Buying new products and customers through acquisition is another way to grow revenues.

"Oracle's bid for BEA is a great integration play. Oracle has bought a lot of solutions over the years, so it is putting a lot of development and money into Fusion, which gives customers ways to create integration among their various Oracle applications. BEA basically helps companies integrate their various applications. So BEA is a logical way for Oracle to create integration among its acquired products, and for Oracle customers to create integration among their Oracle solutions. I don't see who else would come to the table. Business Objects will be a huge integration challenge for SAP, so I don't think the timing would be right there. Buying BEA would be duplicative for HP (NYSE: HPQ) and CA (NYSE: CA), who already have lots of integration capabilities in their offerings."

Also, if you want to check out other recent M&A deals, click here.

Tom Taulli is the author of various books, including The Complete M&A Handbook and The Edgar Online Guide to Decoding Financial Statements.

Ticker Wars: NYSE vs. Nasdaq
The nation's two leading exchanges are battling over a game of alphabet soup. The SEC is expected to rule soon on a proposal that would allow the Nasdaq to display three-character tickers. That's a big deal because investors generally associate a company with a ticker length of one to three letters as being listed on the NYSE or American Stock Exchange
NYSE, Nasdaq locked in battle over ticker symbols - CNNmoney


10 Tainted Stocks: Turnaround Plays or Game Over?
In the post-Enron era, scandal doesn't always tarnish a company for life. There can be buying opportunities. Here are ten stocks and what to look for. They include Ahold, AIG, Apollo Group, CA, DHB Industries, Doral, Jackson Hewitt, Marsh & McLennan, Qwest and Tenet Healthcare.
Can Tainted Stocks Make Good Investments? - Kiplinger.com


Pros and Cons of Going Paperless
Spurred by an array of new electronic services and financial-services firms' promotion of paperless accounts, many consumers are considering doing some of their business online.
Pushing Paperless: The Pros and Cons - WSJ.com


Older, Dangerous Drivers a Growing Problem
Health and safety analysts say as the elderly population booms: aging drivers, clinging to the independence that cars give them but losing their ability to operate the vehicles, causing more accidents. Debates over how to prepare for a boom in elderly drivers are resonating in statehouses across the nation. What should be done?
Older, dangerous drivers a growing problem - USATODAY.com


Why What You Have Is Never Enough
As a country, we are richer than ever. Yet surveys show that Americans are no happier than they were 30 years ago. The key problem: We aren't very good at figuring out what will make us happy. We constantly hanker after fancier cars and fatter paychecks -- and, initially, such things boost our happiness. But the glow of satisfaction quickly fades . So why do we keep striving after these things? Experts offer two explanations.
I Can't Get No Satisfaction - WSJ.com


Hackers Set Traps on Broad Websites
Ordinary websites are fast-becoming a top security threat for PC users. Tainted Web pages first appeared in late 2005. Now, they're turning up as Google advertising links, on Wikipedia and elsewhere, "from top-tier names to mom and pop bakery shops," says Dan Hubbard, vice president of security research at Websense. Cybercrooks are corrupting Web pages by the tens of thousands. Here are a few tips to avoid viruses.
Hackers set traps on broad websites - USATODAY.com

MOST NOTEWORTHY: CKE Restaurants (CKR), Cardinal Health (CAH), eBay (EBAY) and CA Inc (CA) topped today's noteworthy initiation list today:

• Nollenberger believes the Hardee's franchise is entering a period of accelerated growth and initiated shares of CKE Restaurants (NYSE: CKR) with a Buy rating and $27 target.

• Goldman views Cardinal Health (NYSE: CAH) as a as a high quality, focused franchise with strong fundamental outlook driven by margin expansion and improvements in non-drug wholesale businesses and restructuring efforts, reinstating its Buy rating on the company.

• American Technology initiated eBAY Inc (NASDAQ: EBAY) with a Buy rating and $43 target, believing the company is the top play on growth of U.S. e-commerce and they expect upside to numbers tonight.

• Needham believes CA Inc (NYSE: CA) Inc remains in transition as it continues to work on the repackaging of its vast product array into five solution sets and started the company with a Hold rating.

OTHER INITIATIONS:

• Lazard initiated F5 Networks Inc (NASDAQ: FFIV) with a Buy rating and $100 target.

• Citigroup started Clearwire Corp (NASDAQ: CLWR) with a Hold rating and $23 target.

• Morgan Stanley assumed coverage of Vornado RealtyTrust (NYSE: VNO) with an Equal Weight rating.

• SourceFire Inc (NASDAQ: FIRE) was initiated with a Hold rating and $12 target.

• The Wet Seal (NASDAQ: WTSLA) was initiated with an Outperform rating at Cowen.

• Roth Capital initiated shares of Vivus Inc (NASDAQ: VVUS) with a Buy rating and $15 target.

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