MOST NOTEWORTHY: EDO Corp, General Motors, Cameron, Getty Images and Micrus Endovascular were today's noteworthy downgrades:

• EDO Corporation (NYSE: EDO) was downgraded to Neutral from Outperform at Credit Suisse following the acquisition by ITT Corporation (NYSE: ITT). Shares were also downgraded to Market Weight from Overweight at Thomas Weisel and to Hold from Buy at B&T Capital.
  
• Goldman downgraded shares of General Motors Corporation (NYSE: GM) to Neutral from Buy to reflect risk to the company's international and the slowing U.S. economy. Further, Goldman believes expectations for a deal over healthcare costs with unions are now priced into the stock.
  
• Wachovia downgraded Cameron International (NYSE: CAM) to Market Perform from Outperform on valuation.
  
• Kaufman Bros. downgraded shares of Getty Images Inc (NYSE: GYI) to Sell from Hold to reflect reduced expectations following the company's announced price reductions.
  
• CIBC downgraded shares of Micrus Endovascular Corporation (NASDAQ: MEND) to Sector Performer from Outperformer following the company's lowered guidance..

OTHER DOWNGRADES:

• BB&T downgraded Champion Enterprises (NYSE: CHB) and Palm Harbor Homes (NASDAQ: PHHM) to Hold from Buy.
  
• Stifel downgraded HCP Inc (NYSE: HCP) and Medical Properties Trust Inc (NYSE: MPW) to Hold from Buy.
  
• Goldman downgraded E-Trade Financial Corporation (NASDAQ: ETFC) to Neutral from Buy.
  
• Kellwood Company (NYSE: KWD) was downgraded to Neutral from Buy at Broadpoint.

MOST NOTEWORTHY: Refiners, MasTec, Cognos, Forest Labs and Reuters Group were today's noteworthy upgrades:

• Bernstein upgraded shares of Marathon Oil Corporation (NYSE: MRO), Tesoro Corporation (NYSE: TSO), Sunoco Incorporated (NYSE: SUN) and Valero Energy Corporation (NYSE: VLO) to Market Perform from Underperform.
• MasTec Incorporated (NYSE: MTZ) was upgraded to Buy from Accumulate at Think Equity and to Buy from Hold at SMH Capital on valuation following yesterday's sell-off.
• JP Morgan upgraded shares of Cognos Incorporated (NASDAQ: COGN) to Overweight from Neutral citing solid end demand, expanded sales capacity, indications that C8 adoption should see an uptick, and the Applix Inc (NASDAQ: APLX) acquisition.
• Forest Laboratories Inc (NYSE: FRX) was upgraded to Buy from Hold at Jefferies, as the firm believes Forest's victory in the Lexapro patent case eliminates a major overhang and returns the focus to the company's pipeline.
• Lehman upgraded shares of Reuters Group (NASDAQ: RTRSY) to Overweight from Equal Weight to reflect benefits from the company's merger with Thomson Corporation (NYSE: TOC).

OTHER UPGRADES:

• UBS upgraded shares of General Mills Inc (NYSE: GIS) to Buy from Neutral.
• Thornburg Mortgage (NYSE: TMA) was upgraded to Sector Perform from Underperform at RBC Capital Markets.
• CIBC World Markets upgraded EDO Corporation (NYSE: EDO) to Sector Outperformer from Sector Performer.
• Bernstein upgraded shares of Rio Tinto (NYSE: RTP) to Outperform from Market Perform and shares of Anglo American (NASDAQ: AAUK) to Market Perform from Underperform.

Few government contractors are able to offer products for operations on land, in the air, under the sea and in space. One of them is headquartered on 42nd Street, in New York.

EDO Corporation (NYSE: EDO) designs and manufactures products for the aerospace, defense, intelligence, and commercial markets. The firm operates through two reporting segments. The Electronic Systems and Communications unit offers interference cancellation technology; airborne electronic warfare systems; reconnaissance and surveillance systems; command, control, communications, and computers; and antenna products. The Engineered Systems and Services segment provides aircraft armament systems; integrated composite structures; mine countermeasure systems; sonar systems; and engineering services. The US government accounts for more than eighty percent of company sales. Competitors include Lockheed Martin (NYSE: LMT) and Northrop Grumman (NYSE: NOC).

The firm pleased investors earlier in the month, when it reported Q1 EPS of 29 cents and revenues of $255.4 million. Analysts had been looking for 24 cents and $211.9 million. Management also guided FY07 revenues to $1.05-$1.10 billion ($1.01B consensus). Friedman Billings, Credit Suisse, Kaufman Brothers and Am Tech/JSA Research subsequently declared the stock a "buy" and issued price targets in the $36-$40 range. EDO shares popped on the news and then moved into a bullish "flag" consolidation pattern. Prices frequently exit flags moving in the same direction they were traveling when they entered them. In this case, that would be to the upside.

Altogether, brokers now recommend the shares with seven "strong buys," one "buy" and five "holds." Analysts see a 28% growth rate, through the next year. The EDO Price to Sales ratio (0.77), Price to Book ratio (2.32), Sales Growth rate (113.37%) and EPS Growth rate (-0.05 to 0.29 yr/yr) compare favorably with industry, sector and S&P 500 averages. Institutional investors hold about 95% of the outstanding shares. The stock is one of those used to calculate the S&P 600 SmallCap Index. Over the past 52 weeks, it has traded between $20.90 and $32.21. A stop-loss of $27.25 looks good here.

Larry Schutts is a contributing editor for Theflyonthewall.com and the Vice-President of Stockwinners.com.

MOST NOTEWORTHY: The Gaming sector and CBS Corp (CBS) were the most notable companies on today's initiation list.

• Prudential initiated the Gaming sector with a Favorable rating,
  
• They initiated Boyd Gaming Corp (NYSE: BYD), Town Sports International Holdings (NASDAQ: CLUB), Penn National Gaming (NASDAQ: PENN), Shuffle Master Inc (NASDAQ: SHFL), Steiner Leisure Ltd (NASDAQ: STNR) and Great Wolf Resorts Inc (NASDAQ: WOLF) with Outperform ratings.
  
• Ameristar Casinos Inc (NASDAQ: ASCA), MGM Mirage (NYSE: MGM) and WMS Industries Inc (NYSE: WMS) were initiated with Neutral ratings.
• Underweight ratings were given to International Game Tech (NYSE: IGT), Isle of Capri Casinos Inc (NASDAQ: ISLE), Life Time Fitness Inc (NYSE: LTM), Pinnacle Entertainment Inc (NYSE: PNK) and Trump Entertainment Resorts Inc (NASDAQ: TRMP).

• UBS initiated CBS Corp (NYSE: CBS) with a Buy rating and $38 target, citing valuation, dividends and buybacks.

OTHER INITIATIONS:

• Nollenberger believes International Rectifier Corp (NYSE: IRF) is the way to play the trend for energy efficiency, initiating the company with a Buy rating and $60 target.

• Goldman Sachs resumed coverage of AT&T Inc (NYSE: T) with a Buy rating and Level 3 Communications inc (NASDAQ: LVLT) with a Neutral rating.

• Stanford started EDO Corp (NYSE: EDO) with a Hold rating and $25 target; the firm believes EDO can be a turnaround story in 2007, but they recommend investors to stay on the sidelines until after Q4 earnings given their concerns over the quarter and guidance.

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

MOST NOTEWORTHY: International Game Tech (IGT), Cephalon (CEPH) and CVS Corp (CVS) top today's list of upgrades.

• International Game Tech (NYSE:IGT) was upgraded to Buy from Hold at Soleil and to Outperform from Peer Perform at Bear Stearns. Both firms cited valuation as the reason.
• Cephalon, Inc. (NASDAQ:CEPH) was upgraded to Strong Buy from Buy at First Albany following the news that the company was granted a composition of matter patent covering Nuvigil by the U.S. Patent & Trademark Office.
• CVS Corp (NYSE:CVS) was added to Goldman Sachs Americas Conviction Buy List based on valuation.

OTHER UPGRADES:

• American Tech upgraded EDO Corp (NYSE:EDO) to Hold from Sell based on valuation.
• Dean Foods Company (NYSE:DF) was upgraded to Buy from Hold at A.G. Edwards based on valuation.
• Finally, Broadcom Corp. (NASDAQ:BRCM) was upgraded to Outperform from Market Perform at Raymond James.

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