Analyst Upgrades

• Citigroup upgraded Deutsche Bank (NYSE: DB) to Hold from Sell citing reduced legacy risks and strength in the fixed income franchise.
• Janney Montgomery upgraded Fuel Systems (NASDAQ: FSYS) to Buy from Neutral based on valuation, the OEM market in Europe for alternative transportation is growing faster than expected, and the $30M equity raise was smaller than expected.
• Freeport McMoRan (NYSE: FCX) was upgraded to Outperform from Market Perform by FBR Capital. The firm believes that the company will benefit from copper supply issues over the long term, and it thinks the stock has reached an attractive entry point.
• Black & Decker (NYSE: BDK) was upgraded to Neutral from Underperform at Credit Suisse.
• American Tower (NYSE: AMT) was raised to Overweight from Neutral at JPMorgan.
• EMC Corp. (NYSE: EMC) was upgraded at Barclays to Overweight from Equal Weight.

Analyst upgrades:

• Jefferies upgraded Abiomed (NASDAQ: ABMD) to Hold from Underperform on valuation as it believes concerns over the company's Impella heart pump are priced in at current levels. The firm lowered its target price to $7 from $8.
  
• Suntrust upgraded Somanetics (NASDAQ: SMTS) to Neutral from Reduce. The firm believes most of the risk is out of Somanetics shares and that the Q1 report could be a positive catalyst.
  
• Banc of America/Merrill upgraded shares of Telecom Italia (NYSE: TI) to Buy from Neutral on valuation and believes the company's revenue trends are improving.
• China Petroleum & Chemical (NYSE: SNP) was raised to Buy from Neutral at UBS.
• Hexcel (NYSE: HXL) and Johnson Controls (NYSE: JCI) were upgraded to Buy from Neutral at Goldman.

MOST NOTEWORTHY: Tower sector stocks, Tesco Plc and Alcoa were today's noteworthy upgrades:

• RBC Capital upgraded American Tower (NYSE:AMT), Crown Castle( NYSE::CCI), SBA Comm (NASDAQ:SBAC) to Outperform from Sector Perform citing recent weakness in the tower sector group and a continued favorable outlook.
  
• Merrill upgraded shares of Tesco (Other OTC:TSCDY) to Buy from Neutral as they believe it is the only proven growth stock in the sector.
  
• Soleil upgraded shares of Alcoa (NYSE:AA) to Hold from Sell on valuation following the recent weakness.

OTHER UPGRADES:

• Arch Coal (NYSE:ACI) and Peabody Energy (NYSE:BTU) were upgraded to Buy from Hold at Citigroup.
  
• L-3 Comm (NYSE:LLL) was raised to Outperform from Neutral at Cowen.
  
• Jacobs Engineering (NYSE:JEC) was lifted to Buy from Hold at Morgan Joseph.

MOST NOTEWORTHY: Hotels, Continental AG and VNUS Medical were today's noteworthy downgrades:

• Oppenheimer downgraded shares of Marriott International (NYSE: MAR), Intercontinental Hotels (NYSE: IHG) and Choice Hotels (NYSE: CHH) to Perform from Outperform to reflect recent weakness in the leisure segment and expectations for weakening transient business travel.
  
• Societe Generale downgraded shares of Continental AG (OTC: CTTAY) to Sell from Buy on valuation, as they recommend taking profits following the recent rally.
  
• Piper downgraded shares of VNUS Medical (NASDAQ: VNUS) to Neutral from Buy on valuation following the company's patent victory.

OTHER DOWNGRADES:

• Goldman removed China Netcom (NYSE: CN) from the Conviction Buy List.
  
• RBC Capital downgraded Crown Castle (NYSE: CCI) and American Tower (NYSE: AMT) to Sector Perform from Outperform.
  
• Trimble Navigation (NASDAQ: TRMB) was cut to Neutral from Overweight at JP Morgan.

"I am recommending shares of American Tower (NYSE: AMT), a leader in the wireless transmission space," says industry expert Nikhil Hutheesing.

The editor of The Forbes Wireless Stock Watch explains, "The stock is down, the company has top notch customers, strong free cash flow, a growing business within the U.S. and increasingly, its building up its business in emerging markets. AMT is a strong company with strong prospects."

"American Tower, based in Boston, is the leader in the wireless tower business. These towers are essentially real-estate for antennae of wireless service providers. The service providers need the towers because their antennae must be elevated so that their signals propagate, allowing their networks to provide wireless coverage.

"The good news, is that this is a growing business. American Tower's CEO just recently said that he expects 2008 to be one of the best years ever for American Tower. That, of course, is great news.

"It also means that it is very likely that the company's subscriber base will also continue to grow at a steady pace. Among its subscribers are wireless service providers-companies such as Verizon, Sprint Nextel and AT&T.

This is pretty crazy: American Tower (NYSE: AMT) has sued former Goldman Sachs executive Jide Zeitlin, alleging that he forwarded a negative article on the stock to two top institutional investors following the company -- and used CEO Jame Taiclet's name in the sender line, creating the impression that it was him forwarding the article.

According to the Wall Street Journal, "Mr. Zeitlin left Goldman Sachs in 2005 and later founded Independent Mobile Infrastructure Ltd., a closely held rival of American Tower that owns, leases and operates wireless towers in India ... The complaint alleges that Mr. Zeitlin also provided Fortune reporter Bethany McLean with information for the article, which looked at the company's executive-compensation practices."

Mr. Zeitlin is accused of computer fraud and defamation. The suit alleges that the email "was part of a longstanding and ongoing pattern of conduct intended to undermine American Tower's relationships with its investors and its position in the mobile infrastructure marketplace to the defendants' benefit."

The merits of the lawsuit aside, it certainly appears -- if the reports are correct -- that Mr. Zeitlin, who is on the board of directors at Coach and is chairman of the board at Amherst College, may have behaved badly.

Question is whether pursuing such a lawsuit against a competitor who may have engaged in a fairly childish ploy to undermine the company, is really a worthwhile use of shareholder capital, legal fees and management's time? I'm not so sure.

"Score one for the barbarians" -- so reads the New York Post today. The reference, of course, is to Barbarians at the Gate, the sordid tale of the leveraged buyout of RJR Nabisco in the 1980s. Today, the private equity barbarians have won another battle: there will be no new tax on carried interest, at least not this year.

Charles Rangel, the House Ways and Means Committee Chairman has dropped a proposed change in the tax laws that would raise taxes on hedge fund managers. The change was relatively simple, raising the tax rate on fund profits and management fees from the current 15% to the 35% that corporations (are supposed to) pay. Needless to say, the private equity industry fiercely opposed the change, which would have raised $54 billion in new taxes.

The change in the tax code was part of a bill aimed at alleviating the effects of the Alternative Minimum Tax, which now affects 23 million households. The idea was to "fix" the AMT to keep it from being applied too broadly; the resulting loss in revenue could then be made up by increasing taxes on fund managers. But it looks like the managers are too powerful to allow that to happen, at least this time around. Hey, do you think this could have anything to do with campaign contributions and the growing political power of the newly gilded elite? Nah, couldn't be . . .

I admire the cleverness of Iowa Republican Senator Chuck Grassley's tax proposal. Bloomberg News reports that Grassley wants to introduce a bill that will link passage of a tax increase on private equity firms to an Alternative Minimum Tax (AMT) tax cut.

Grassley's proposal would increase from 15% to as high as 37.9% the tax rate that private equity firms pay on their profits with a measure shielding 23 million mostly middle-income households from an AMT increase this year. Unless Congress acts, the AMT will impose a $45 billion tax increase on 23 million households in 2007; permanently repealing the AMT would cost the government more than $1 trillion in revenue.

While it's not clear how much additional revenue the private equity tax rate increase would raise, the politics of the linkage is clever. That's because it will be hard for politicians seeking reelection to vote against a measure that could ease the lives of 23 million potential voters. If they happen to at the same time raise the taxes of those big campaign contributors, the need to help middle class AMT voters will offer the politicians some cover.

Peter Cohan is president of Peter S. Cohan & Associates He also teaches management at Babson College and edits The Cohan Letter.

With the 2006 tax year filing deadline coming in a little over a week from now, have you done yours yet? This is the question I've been asked dozens of times in the last week, as taxes provide more water-cooler talk in the first few weeks of April than the final four of the NCAA tournament. The culprit? Anxiety would be my guess.

Anyway, the now-outmoded alternative minimum tax (AMT), created as a roadblock to tax avoidance by the affluent, is now trickling down to the middle class (and has been for years now). The AMT is a tax structure that disallows personal exemptions, the standard deduction or a host of other tax breaks that middle-income families enjoy under the regular tax code. For many single-earner or double-earner families, those exemptions and deductions can mean thousands of dollars in tax differences. These are no small potatoes to families that even make six figure incomes but have a huge tax burden due to the AMT.

Is it time to banish the AMT or re-structure it for current economic circumstances? This is being discussed in many circles, even in Congress. If the AMT is re-structured, which class of wage earners would it effect most? With the AMT tax affecting non-tax-avoiding citizens who just happen to live in states with higher state and local taxes, time has come for a change. Or (jokingly), states with higher state and local taxes could face a mass exodus of taxpayers to other states. Maybe another real estate bubble is on the horizon. Alright, enough joking. The AMT is all too serious.