Analyst Upgrades

• Bunge (BG) to buy from hold at Deutsche Bank.
• Textron (TXT) to overweight from neutral at JPMorgan.
• CSX (CSX) to buy from neutral and Pulte Group (PHM) to conviction buy from neutral at Goldman.
• Aol (AOL) to buy from neutral at UBS.
• Kohlberg Capital (KCAP) to outperform from market perform at JMP Securities.
• Owens Corning (OC) to buy from neutral at BofA/Merrill.
• Jefferies (JEF) to buy from neutral at Ticonderoga.
• Harris (HRS) to outperform from perform at Oppenheimer.

Analyst Upgrades

• Netflix (NFLX) and Zions Bancorp (ZION) to outperform from neutral at Credit Suisse.
• Akamai (AKAM) to buy from neutral at Merriman.
• CSX (CSX) to overweight from equal weight at Barclays.
• Nordstrom (JWN) to buy from neutral, WellCare (WCG) to conviction buy from buy and Humana (HUM) to neutral from sell at Goldman.
• E-Commerce China Dangdang (DANG) to overweight from neutral at Piper Jaffray.
• VMware (VMW) to buy from neutral at BofA/Merrill.
• Celanese (CE) to overweight from equal weight at Morgan Stanley.

Analyst Upgrades

• Goodyear Tire (GT) to Overweight from Underweight at Morgan Stanley.
• Salix (SLXP) to Outperform from Market Perform at Wells Fargo.
• Euroseas (ESEA) to Outperform from Market Perform at FBR Capital.
• Norfolk Southern (NSC) and Hexcel (HXL) to Outperform from Sector Perform at RBC Capital.
• BB&T (BBT) and Triangle Capital (TCAP) to Buy from Neutral at Janney Capital.
• Mobile TeleSystems (MBT) to Outperform from Neutral at Credit Suisse.
• Affymax (AFFY) to Buy from Hold at Auriga.
• Vanguard Natural (VNR) and Tortoise Energy (TYY) to Outperform from Neutral at RW Baird.
• Protective Life (PL) to Neutral from Underperform at BofA/Merrill.

The Obama administration has agreed to scale back requirements for new anticollision technology on freight trains, known as Positive Train Control (PTC). This stands to benefit companies such as CSX (CSX), Union Pacific (UNP), Norfolk Southern (NSE) and Berkshire Hathaway's (BRK.A) Burlington Northern Santa Fe.

PTC technology will automatically stop the train if a conductor misses its stop signal, coming in light of a 2008 train collision which killed 25 people.

This could possibly add 25% to CSX's free cash flow, which at these levels would make CSX and other rail companies undervalued by these metrics.

Jason is a co-founder of Benzinga.com.

The shares of railroad company CSX Corp. (CSX), which I first wrote about on May 1, 2009, at a price of $30.56, have surged through $60 and $70 resistance levels, and now obviously would be a good time to consider taking some profits, if you're near $30 with CSX.

However, those investors who can tolerate the risk can maintain their full position with CSX, as there's more upside ahead.

Look for CSX's 2011 revenue to increase 6% to 8%, after a nearly 18% surge in 2010. Volumes should rise 5% to 7% this year, and overall prices for transport services should rise, albeit with some softness in selected price categories. Any above-trend U.S./global GDP growth rates will improve CSX's performance.

Analyst upgrades:

• Verizon (VZ) to conviction buy from buy at Goldman.
• CSX (CSX) to outperform from market perform at Wells Fargo.
• AK Steel (AKS) to overweight from neutral, as well as Lorillard (LO) and Fifth Third Bancorp (FITB) to neutral from underweight, at JPMorgan.
• Marathon Oil (MRO) to overweight from equal weight at Morgan Stanley.
• Corning (GLW) to buy from outperform at CLSA.
• Quest Diagnostics (DGX) to buy from hold at Jefferies and to outperform from sector perform at RBC Capital.
• Salesforce.com (CRM) to buy from neutral at Roth Capital.
• Baker Hughes (BHI) to buy from hold at Weeden and to outperform from neutral at Macquarie.
• Western Digital (WDC) and Seagate (STX) to buy from underperform at BofA/Merrill.

Union Pacific Corp. (UNP), a railway concern whose colleagues include CSX Corp. (CSX) and Norfolk Southern Corp. (NSC), was down 2.6% to $94.78 at one point during today's afternoon session. Why is the market unhappy with the stock? The catalyst was an earnings report. Were the numbers so bad?

After reading a summary of the company's fourth quarter by the Associated Press, I came away thinking that the stats were actually quite attractive. Net income jumped 44% to $1.56 per share. This figure was eight pennies ahead of the overall projection.

The shares of railroad CSX Corp.'s (CSX), which I first wrote about on May 1, 2009, at a price of $30.56, have zoomed higher after a summer lull, and I obviously still like the shares at this stage.

Look for CSX's 2010 revenue to increase 6% to 8% in 2011, after a 15% to 17% surge in 2010. Volumes should rise 6% to 8%, and overall prices for transport services should firm, albeit with some softness in selected price categories. Any above-average U.S. or global GDP grow rates will improve CSX's performance.

Analyst Upgrades

• Goldman upgraded CSX (CSX) to neutral from sell.
• General Cable (BGC) was upgraded to buy from hold at KeyBanc.
• Morgan Stanley upgraded Chart Industries (GTLS) and Dresser Rand (DRC) to overweight from equal weight.
• Blackrock (BLK) was upgraded to outperform from neutral at Macquarie.
• Credit Suisse upgraded Zions Bancorp (ZION) to neutral from underperform and GameStop (GME) to outperform from neutral.
• Honeywell (HON) was upgraded to outperform from sector perform at RBC Capital.
• Panera Bread (PNRA) was upgraded to buy from neutral at SunTrust.

Railway company CSX (CSX) shares are up for the year. Even though the chart may look choppy, the stock is up nearly 35% year-to-date. Tuesday, it closed at a price of $57.26. After the bell, the company, which competes with such companies as Norfolk Southern (NSC) and Union Pacific (UNP), released third-quarter earnings were, and investors thought enough of them to give the company a bid in the extended session.

According to theflyonthewall, earnings per share of $1.08 beat the market's estimate by four pennies. That $1.08 figure was, as the corporate press release states, 48% higher than the year-ago income level.

The earnings season kicked off last week with better-than-expected results from Alcoa (AA) and Yum! Brands (YUM), while Marriott (MAR) and Pepsico (PEP) met consensus EPS estimates. This week, bellwether companies Intel (INTC), General Electric (GE), Google (GOOG) and JPMorgan Chase (JPM) are scheduled to report their third-quarter results, and analysts polled by Thomson Reuters are looking for earnings growth from all of them.

Santa Clara, Calif.-based Intel announced the acquisition of McAfee and joint ventures with General Electric and Nokia (NOK) during its third quarter. Analysts forecast earnings for that period to come to 50 cents per share, which is up 34.0% from the same period of last year. The number one semiconductor maker's revenue for the three months ended in September is expected to total $11.0 billion, or 17.1% more than a year earlier. Looking ahead to the full year, the forecast thus far is for earnings of $1.94 per share (+44.8%) and $43.3 billion in revenue (+23.4%). The per-share earnings topped analysts' expectations in the past four quarters, by as much as a dime per share.

Deere (DE) is recently up 6% after the U.S. lowered its outlook for corn and wheat production. Call option volume of 21K contracts compares to put volume of 19K contracts. October put option implied volatility is at 29, November is at 32, December is at 33, verses its 26-week average of 35, according to Track Data, suggesting decreasing price movement.

CSX Corp. (CSX) is expected to report Q3 EPS on October 13. October put option implied volatility is at 37, January is at 33, near its 26-week average, according to Track Data, suggesting nondirectional price risk.

Options Update is by Stock Specialist Paul Foster of theflyonthewall.com.

Analyst Upgrades

• Deutsche Bank upgraded Dr Pepper Snapple (DPS) to buy from hold based on valuation. The firm keeps a $39 target on the stock.
• Piper Jaffray upgraded Kenexa (KNXA) to overweight from neutral, citing a strengthening of trends for the company. The firm has a $29 price target on the stock.
• Janney Montgomery upgraded Gaylord Entertainment (GET) to buy from neutral on expectations the company will benefit from strong trends in 2011. The firm raised its target for shares to $35 from $32.50.
• MeadWestvaco (MWV) was upgraded to outperform from neutral at Credit Suisse.
• EADS (EADSY) was upgraded to overweight from neutral at JPMorgan.