MOST NOTEWORTHY: Bank of America, Entercom Comm and Opnext were today's noteworthy downgrades:

• Morgan Stanley downgraded Bank of America (NYSE:BAC) to Underweight from Equal Weight as they believe the company may need to raise an additional $12B in capital in Q4 and cut its dividend by 20%.
  
• Citigroup cut Entercom Comm (NYSE:ETM) to Sell from Hold as they see near-term downside risk for radio stocks given the weaker economic backdrop and underperforming radio ad spend. The firm lowered their target to $5 from $9.75.
  
• Merriman downgraded Opnext (NASDAQ:OPXT) to Neutral from Buy following the acquisition of Stratalight, as they believe the deal is too stock heavy given the current valuation and has concerns about competition in the 40G market.

OTHER DOWNGRADES:

• Columbia Banking (NASDAQ:COLB) was downgraded to Market Perform from Outperform at Keefe Bruyette.
  
• Deutsche Bank cut Luxottica (NYSE:LUX) to Hold from Buy. Cadbury (NYSE:CBY) was lowered at Merrill to Underperform from Neutral.

MOST NOTEWORTHY: Genentech, Digital River and Entercom Comm were today's noteworthy downgrades:

• Jefferies downgraded Genentech (NYSE: DNA) to Hold from Buy and lowered their target to $67 from $85 following the panel vote against Avastin approval for first-line metastatic beast cancer. They believe an FDA approvable letter with request for more data is the most likely outcome on the 2/23/08 PDUFA date and lowered their estimates.
• Deutsche Bank downgraded Digital River (NASDAQ: DRIV) to Hold from Buy, as they expect shares to remain range-bound in the near-term given expectations or slower growth in 2008 and a lack of diversification away from Symantec (NASDAQ: SYMC).
• Entercom Comm (NYSE: ETM) was lowered to Market Perform from Outperform at Wachovia following a revision in the firm's long-term growth rate for radio.

OTHER DOWNGRADES:

• Wachovia downgraded the REIT office sector to Market Weight from Overweight, downgrading Corporate Office Properties (NYSE: OFC), Maguire Properties (NYSE: MPG) and Parkway Properties (NYSE: PKY) to Market Perform from Outperform.

MOST NOTEWORTHY: Expedia (EXPE), YRC Worldwide (YRCW), Fiserv (FISV), and select radio stocks were today's noteworthy upgrades:

• JP Morgan upgraded Expedia (NASDAQ: EXPE) to Overweight from Neutral on expectations for U.S. bookings growth and margin stabilization.

• YRC Worldwide (NASDAQ: YRCW) was raised to Neutral from Underperform based on valuation.

• Fiserv (NASDAQ: FISV) was upgraded to Sector Outperformer from Sector Performer at CIBC following the CheckFree (CKFR) acquisition.

• Banc of America upgraded Citadel Broadcasting (NYSE: CDL), Cox Radio (NYSE: CXR) and Entercom Comm (NYSE: ETM) to Neutral from Sell as they believe it is time to cover short positions with the expected Q3 weakness likely priced into shares. They caution that this upgrade is not a buy signal as downside risk remains...

OTHER UPGRADES:

• Wachovia upgraded Cabela's (NYSE: CAB) and KBR Inc (NYSE: KBR) to Outperform from Market Perform.

• Baird raised Lear (NYSE: LEA) To Outperform from Neutral.

• Nokia (NYSE: NOK) was upgraded to Outperform from Neutral at Credit Suisse.

• Pacific Crest upgraded shares of eBay (NASDAQ: EBAY) to Outperform from Sector Perform.

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

Today, Clear Channel Communications (NYSE: CCU) reported its Q1 results. Revenues increased from $1.49 billion to $1.61 billion, while net income rose from $96.8 million or $0.19 per share to $102.2 million, or $0.21 per share.

But the stock barely moved. Then again, Clear Channel is in the process of a leveraged buyout and the deal is looking iffy.

Recently, Clear Channel's private equity buyers -- Bain Capital Partners and Thomas H. Lee Partners -- upped their bid from $37.60 to $39. But it may not be enough to satisfy major investors like Fidelity Investments and Highfields Capital Management.

Looking at the five-year stock chart of Clear Channel is depressing. The stock price is off about a third. The largest radio operator can't seem to find growth opportunities, and then there are the threats from Internet radio, Apple (NASDAQ: AAPL) iPods, satellite radios, and other digital alternatives.

So if things are so bleak, why would Bain and Thomas H. Lee want to buy the company? Aren't these folks smart and have a history of posting strong returns?

I think the answer is fairly obvious. These investors see a value play.

To the tune of just $12.5 million, the Federal Communications Commission on Friday wagged a white-gloved finger at four top radio broadcasters -- Clear Channel Communications Inc. (NYSE: CCU), CBS Radio (NYSE: CBS) (not CBS's best week), Entercom Communications Corp. (NYSE: ETM) and Citadel Broadcasting Corp. (NYSE: CDL) -- resolving a two-year payola investigation. "A breakthrough and a milestone" in the war on payola, FCC Commissioner Jonathan Adelstein called the settlement.

The FCC's longstanding regulations don't actually prohibit the pay-for-play system, they merely require its disclosure at the time of broadcast. Said Adelstein, "These rules are based on the basic principle that listeners and viewers are entitled to know who is seeking to persuade them so they can make up their own minds about the content."

Such a principle is hardly "basic," and ignorance of sponsorship gives no pass to indiscriminating radio listeners. Marketing pays our fare at every turn; we've become resigned to the notion that behind every song we hear, every TV image we view, every word we read (including these), a dollar sign usually lies quietly. The trick to Adelstein's basic principle is not in knowing who's paying the piper -- or who the piper's paying, in this case -- but in quieting one's cynicism enough to hear the music.