Analyst upgrades:

• Banc of America/Merrill upgraded DPL Inc (NYSE: DPL) to Neutral from Underperform following the settlement agreement with staff of the Public Utilities Commission of Ohio on Electric Security Plan.
  
• Friedman Billings upgraded SeaBright Insurance (NYSE: SBX) to Outperform from Market Perform on valuation as they believe shares are oversold at current levels. Despite upgrading, the firm lowered its target price to $14 from $16.
  
• JP Morgan upgraded AT&T (T) to Overweight from Neutral as it believes upside earnings revisions are likely in 2009 due to the company's conservative wireline margin outlook. The firm finds the stock's valuation attractive at current levels and raised their target on shares to $28 from $24.
• Chubb (NYSE: CB) was upgraded to buy from Neutral at UBS.
  
• Cascal B.V. (NYSE: HOO) was raised to Outperform from Neutral at Credit Suisse.
  
• Healthcare Realty Trust (NYSE: HR) was upgraded at Keefe Bruyette to Outperform from Market Perform.

MOST NOTEWORTHY: Pioneer Southwest, Art Technology and Real Goods Solar were today's noteworthy initiations:

• Friedman Billings initiated Pioneer Southwest (NYSE: PSE) with an Outperform rating and $25 target. The firm believes the current valuation does not reflect potential upside from the upstream drop-downs, which would result in higher distributions.
  
• ThinkPanmure believes Art Technology (NASDAQ: ARTG) is well-positioned to benefit from a strong replatforming cycle. Shares were initiated with a Buy rating and $4.50 target.
  
• Broadpoint said Real Goods Solar (NASDAQ: RSOL) has a disciplined operational model leading to profitable growth, and started shares with a Buy rating and $10 target. ThinkPanmure also initiated Real Goods Solar with a Buy rating and $10 target and said the company is well-positioned given strong underlying trends that include higher retail electricity costs, legislative renewable energy standards and incentives, declining solar photovoltaic systems costs, and "green momentum."

OTHER INITIATIONS:

• Credit Suisse assumed Telmex International (NYSE: TII) with a Neutral rating and $18 target.
  
• Athenahealth (NASDAQ: ATHN) was initiated with a Hold rating at BB&T Capital.
  
• Western Gas Partners (NYSE: WES) was started at Citigroup with a Hold rating and $18.50 target.

Art Technology Group (NASDAQ: ARTG) dabbles in the fine art of business, providing software that helps with customer-service needs, including online-sales management. Included on the firm's roster of past and present clients are Best Buy (NYSE: BBY), Citibank (NYSE: C), and Target (NYSE: TGT).

When the company last visited the earnings confessional in late October, it reported a 64% jump in revenue to $35.9 million, thanks in large part to gains in services revenue. For fiscal 2007, ARTG expects to bank revenue of $130 million to $133 million, with a small net loss of $5 million to $7 million expected for the full year as well.

For much of the past decade, ARTG has struggled in penny-stock territory. From early 2002 through early 2006, the stock enjoyed precious little movement north of the $2.00 zone. Currently, thanks to some recent solid price action, ARTG shares are trading in territory not explored in nearly six years. In the wake of last month's earnings report, the stock spiked higher to overtake its April 2006 peak and pass the $4.00 level.

MOST NOTEWORTHY: Alcoa (AA), Rigel Pharma (RIGL), Isis Pharma (ISIS), Cytokinetics (CYTK) and F5 Networks (FFIV) were today's noteworthy initiations:

• RBC believes shares are expensive, but feels Alcoa (NYSE: AA) has put itself in play and a bid for the company is possible. The firm resumed coverage with a Sector Perform rating and a $51 target.

• Credit Suisse initiated Rigel Pharmaceuticals (NASDAQ: RIGL) with an Outperform rating, believing R788 in ITP alone justifies current value, while RA and pipeline provide potential upside.

• Isis Pharmaceuticals (NASDAQ: ISIS) was initiated with a Buy rating and $17 target at Jefferies; the firm believes Isis's pipeline holds promise and appears under appreciated at the current valuation.

• Credit Suisse is positive on Cytokinetics (NASDAQ: CYTK) congestive heart failure candidate CK-453 and views the market as undeserved, starting shares with an Outperform rating and $15 target.

• Unterberg initiated shares of F5 Networks (NASDAQ: FFIV) with a Market Perform based on valuation...

OTHER INITIATIONS:

• Credit Suisse initiated Mobile Mini (NASDAQ: MINI) with a Neutral rating.

• Art Technology (NASDAQ: ARTG) was initiated with a Buy rating at Pacific Growth.

• Banc of America started Grant Prideco (NYSE: GRP) share with a Buy rating and $67 target.

• Morgan Joseph initiated Harris Stratex Networks (NASDAQ: HSTX) with a Buy rating.

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