Analyst upgrades:

• Canaccord upgraded Rio Tinto (NYSE: RTP) to Buy from Hold citing valuation following the severe price decline following BHP Billiton's (NYSE: BHP) dropped bid.
• UBS upgraded Itron (NASDAQ: ITRI) to Buy from Neutral citing valuation and defensive business mix.
• Jefferies upgraded shares of HealthSouth (NYSE: HLS) to Buy from Hold on valuation and maintains a $13.50 target.
• Melco PBL Entertainment (NASDAQ: MPEL) was raised to buy from Neutral at Goldman.
• PG&E (NYSE: PCG) was upgraded at Merrill Lynch to Buy from Neutral.
• HSBC Holdings (NYSE: HBC) was upgraded to Buy from Neutral at UBS.

Analyst downgrades:

MOST NOTEWORTHY: WebMD Health Corp (WBMD) was today's only noteworthy initiation:

• William Blair started the online health information portal, WebMD Health Corp (NASDAQ: WBMD) with an Outperform rating. The firm believes WebMD is positioned to benefit from various trends in the industry, including the increasing use of the Internet for information and patients' assuming more responsibility for their health care decisions.

OTHER INITIATIONS:

• Pacific Growth initiated United Therapeutics Corp (NASDAQ: UTHR) with a Neutral rating. The firm sees potential revenue risk from patient switching and reduced new patient starts in response to reports about higher incidence of serious Gram negative infections resulting in a Dear Doctor letter being sent to all IV-Remodulin prescribers in September 2006.

• Soleil Securities started Genuine Parts Co (NYSE: GPC) with a Buy rating and $65 target, noting that Genuine has the highest yield in the auto sector.

• Nollenberger doesn't see a catalyst for double-digit growth in Lam Research Corp (NASDAQ: LRCX) for the next 12-18 months and initiated the company with a Neutral rating and $40 target.

• ConAgra Foods Inc (NYSE: CAG) was initiated with a Hold rating at AG Edwards on valuation.

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