LSI Corporation (NYSE: LSI) designs, develops and markets semiconductors used by original equipment manufacturers in the data networking and consumer electronics markets. It also provides a wide variety of storage systems, sub-assemblies, and storage management software applications. Top clients include Hewlett-Packard (NYSE: HPQ), IBM (NYSE: IBM) and Sony (NYSE: SNE).
The firm surprised the Street last week, when it reported Q1 EPS of ten cents and revenues of $660.75 million. Analysts had been looking for seven cents and $636 million. Management also guided Q2 EPS to 8-12 cents (seven cent consensus) and Q2 revenues to $650-$680 million ($634.62M consensus). Kaufman Brothers and Caris subsequently declared the stock a "buy". Friedman Billings and Deutsche Securities called it a "hold". All four firms upped their price targets from the range $4.50-$6.00 to the range $6.50-$7.00.
MOST NOTEWORTHY: SLM Corp, Tempur Pedic and ITT Corp were today's noteworthy downgrades:
Morgan Stanley downgraded SLM Corp. (NYSE: SLM) to Underweight from Equal Weight citing the impact on earnings from reduced government subsidies and disrupted capital markets.
Tempur Pedic (NYSE: TPX) was cut to Neutral from Overweight at JP Morgan citing the consumer slowdown and increased competition.
Credit Suisse downgraded ITT Corp. (NYSE: ITT) to Neutral from Outperform citing the surprised management changes announced last night.
OTHER DOWNGRADES:
Cowen downgraded TechTarget (NASDAQ: TTGT) to Neutral from Outperform.
Merriman lowered Jamba (NASDAQ: JMBA) to Neutral from Buy.
LSI Corp. (NYSE: LSI) was downgraded at Merrill to Neutral from Buy.
MOST NOTEWORTHY: Semiconductors, ADC Telecomm and Nationwide Financial were today's noteworthy upgrades:
Banc of America upgraded the Semiconductor Sector to Overweight from Market Weight citing indications of a bottom given earnings estimate revision momentum and supply chain inventory levels. The firm upgraded Intel (NASDAQ:INTC), Power Integrations (NASDAQ:POWI) and Semtech (NASDAQ:SMTC) to Buy from Neutral and PMC Sierra (NASDAQ:PMCS) and LSI Corp (NYSE:LSI) to Neutral from Sell.
Deutsche Bank upgraded shares of ADC Telecomm (NASDAQ:ADCT) to Buy from Hold as they believe April consensus estimates could prove conservative.
UBS raised Nationwide Financial (NYSE::NFS) to Buy from Neutral and believes a higher offer by Nationwide Mutual is likely.
OTHER UPGRADES:
Halliburton (NYSE:HAL) was upgraded to Buy from Neutral at Goldman.
Westlate Chemical (NYSE:WLK) was raised to Overweight from Equal Weight at Morgan Stanley.
LSI Corporation (NYSE: LSI) designs, develops and markets semiconductors used by original equipment manufacturers in the data networking and consumer electronics markets. It also provides a wide variety of storage systems, sub-assemblies, and storage management software applications. In August, the firm signed a definitive agreement to sell its mobility products business to Infineon Technologies (NYSE: IFX) for $450 million in cash and a $50 million performance-based payment. The sale was the result of a strategic realignment, following LSI's April merger with Agere Systems. Top clients include Hewlett-Packard (NYSE: HPQ), IBM (NYSE: IBM) and Sony (NYSE: SNE).
The stock has been a steady gainer over the past two months, in response to such issues as the mobility products sale, a new $500 million stock repurchase program, the sale of semiconductor assembly and test operations in Thailand, the acquisition of fabless chip producer Tarai, new product announcements, and generally favorable analyst commentary. Shares have been advancing through a positive trading channel. The price is currently positioned at the base of that channel, suggesting the potential for a turn back toward the top.
Brokers recommend the issue with three "strong buys," four "buys," five "holds" and a "sell." Analysts estimate a 110% growth rate, through the next year. The LSI Price to Sales ratio (2.49), Price to Book ratio (1.12) and Sales Growth rate (36.82%) compare favorably with industry, sector and S&P 500 averages. Institutional investors hold about 86% of the outstanding shares. The stock is one of those used to calculate the S&P 500 Index. Over the past fifty-two weeks, it has traded between $5.99 and $11.08. A stop-loss of $6.35 looks good here. Note that the firm is next expected to report quarterly results on October 24, after the close.
MOST NOTEWORTHY: General Motors (GM), Sirius Satellite Radio (SIRI), LSI Corp (LSI), Chevron (CVX), National City (NCC) and LivePerson (LPSN) were today's noteworthy upgrades:
Goldman Sachs upgraded General Motors (NYSE: GM) to Buy from Neutral as they believe the stock will rise on expectations of sizeable concessions from union talks. The broker said this is a "tactical trading call."
Morgan Joseph upgraded shares of Sirius Satellite Radio (NASDAQ: SIRI) to Buy from Hold citing the OEM ramp & modest consensus estimates.
American Technology added LSI Corp (NYSE: LSI) to their Focus List as they believe investors are discounting a lot of negative assumptions at the current valuation. They recommend using the recent weakness to aggressively build positions below $9.
Bank of America upgraded shares of Chevron Corp (NYSE: CVX) citing valuation and potential volume increases in its deepwater portfolio.
AG Edwards upgraded National City (NYSE: NCC) to Hold from Sell and Roth upgraded LivePerson to Hold from Sell on valuation...
MOST NOTEWORTHY: Circuit City Stores (CC), select airline stocks and General Electric (GE) were today's noteworthy downgrades:
Citigroup downgraded shares of Circuit City Stores NYSE: CC) to Hold from Buy and lowered their target to $17 from $26 following management's second guidance cut in one month; the firm thinks there is more bad news to come. The electronics-retailer was also downgraded to Market Perform from Outperform at Raymond James and to Neutral from Buy at Robinson Humphries. Circuit City was cut to Sell from Hold at Soleil.
UBS downgraded six airline stocks on fuel price concerns and their belief that demand may fall as economic growth slows in the domestic market. Downgrades are as follows: AMR Corp. (NYSE: AMR), UAL Corp. (NASDAQ: UAUA) and U.S. Airways Group (NASDAQ: LCC) were downgraded to Reduce from Buy; Southwest Airlines Co (NYSE: LUV) and Continental Airlines (NYSE: CAL) were downgraded to Neutral from Buy; JetBlue Airways Corp (NASDAQ: JBLU) was downgraded to Reduce from Neutral.
General Electric (NYSE: GE) was removed from Goldman Sachs' Americas Conviction Buy list on valuation.
OTHER DOWNGRADES:
Prudential expects Sprint Nextel Corp's (NYSE: S) company-specific problems to continue and weigh on shares and downgraded the phone-giant to Underweight from Neutral.
Banc of America downgraded shares of LSI Corp (NYSE: LSI) to Neutral from Buy.
Buckingham cut Best Buy Co (NYSE: BBY) to Neutral from Strong Buy.
MOST NOTEWORTHY: Ericsson (ERIC), Hiland Holdings (HPGP), AVX Corp (AVX), Tibco Software Inc (TIBX) and UPS (UPS) were some of today's notable downgrades:
UBS downgraded shares of Ericsson (NASDAQ: ERIC) to Neutral from Buy following the company's Q1 report that showed weaker than expected operating cash flow.
Hiland Holdings (NASDAQ: HPGP) was cut from Wachovia to Underperform from Market Perform.
AVX Corp (NYSE: AVX) was downgraded to Underweight form Neutral at JP Morgan.
MOST NOTEWORTHY: Shutterfly, Inc (SFLY), Marvel Entertainment, Inc (MVL), National CineMedia, Inc (NCMI) and Wal-Mart Stores (WMT) were some of today's noteworthy initiations:
Cantor sees significant opportunities for growth at Shutterfly Inc (NASDAQ: SFLY), driven by new business lines, international expansion and new products, among other things, and started SFLY Shares with a Buy rating.
Stifel initiated Marvel Entertainment (NYSE: MVL) with a Buy rating and believes the impending film slate provides a long-term growth opportunity and serves as a catalyst.
Thomas Weisel started National CineMedia Inc (NASDAQ: NCMI) with an Overweight rating, as the firm still believes the company is among the fastest-growing, ad-supported media companies in the U.S. given its ownership in NCM LLC, which has established a leadership position in the cinema advertising market.
MOST NOTEWORTHY: Callaway Golf Co (ELY), Genentech, Inc (DNA), LSI Logic Corp (LSI) and Evergreen Solar, Inc (ELSR) were today's more notable initiations.
Merriman initiated Callaway Golf Co(NYSE: ELY) with a Buy rating and believes new management could get the company back on track.
Genentech (NYSE:DNA) was initiated at Prudential with a Neutral rating and $92 target. The firm believes the lack of a new product launch before 2010 is a concern for long-term growth.
American Technology believes shares of LSI Logic (NYSE: LSI) are undervalued, initiating the company with a Buy rating and $13 target, given synergies and revenue opportunities from the merger with Agere Systems, Inc (AGR).
Bank of America initiated Evergreen Solar Inc (NASDAQ: ESLR) with a Sell rating and $8 target to reflect the lack of visibility on its growth, which puts the company at a competitive disadvantage.
OTHER INITIATIONS:
Salary.com, Inc (NASDAQ: SLRY) was initiated at Pacific Crest and Wachovia with an Outperform rating and at Thomas Weisel with an Overweight rating.
Prudential started Gilead Sciences, Inc (NASDAQ: GILD) with an Overweight rating and $90 target.
Kaufman Brothers started VeriChip Corp (NASDAQ: CHIP) with a Buy rating, believing the company's growth position is compelling given its patented, FDA-approved microchip that can be implanted into humans for a variety of applications.
Citigroup started Amgen, Inc (NASDAQ: AMGN) with a Hold rating and $64 target.
MOST NOTEWORTHY: The Coca-Cola Co (KO), Merck & Co (MRK) and National Semiconductor (NSM) were some of today's more notable upgrades:
The Coca-Cola Co (NYSE: KO) was upgraded to Buy from Hold with a $57 target at Deutsche Bank based on valuation.
Merck & Co (NYSE: MRK) was upgraded to Buy from Hold at Citigroup to reflect the firm's bullish outlook for the company's diabetes drug, Januvia. Citigroup believes the drug will help drive above-consensus earnings following its recent diabetes survey.
National Semiconductor (NYSE: NSM) was upgraded to Strong Buy from Market Perform at Raymond James.
OTHER UPGRADES:
Robert W. Baird upgraded shares of Comverse Technology (NASDAQ: CMVT) to Outperform from Neutral based on valuation and potential catalysts that include a possible break-up of the company.
RBC upgraded Research in Motion (NASDAQ: RIMM) to Outperform from Sector Perform with a $180 target, as checks indicate shipment and sub-momentum from the company's product cycle will be significantly greater than anticipated.
Kellogg (NYSE: K) was added to Lehman Brothers' Favorites List.
Stanford upgraded Brooks Automation (NASDAQ: BRKS) to Buy from Hold with a $20 target on improved industry conditions, cash generation and valuation.
Cowen added Ericsson Telephone Co (NASDAQ: ERIC) and Oracle Corp (NASDAQ: ORCL) to its Focus List.
Matrix USA upgraded J.C. Penney Co Inc (NYSE: JCP) to Strong buy from Buy with an intrinsic value of $115.
Wedbush upgraded LSI Logic Corp (NYSE: LSI) to Buy from Hold with a $13 target.
MOST NOTEWORTHY: Marvel Entertainment Inc (MVL) and Affymetrix Inc (AFFY) were today's most notable initiations:
Sanders Morris started Marvel Entertainment Inc (NYSE: MVL) with a Buy rating and $34 target on the belief that 2007 guidance is conservative.
Thomas Weisel initiated Affymetrix Inc (NASDAQ: AFFY) with an Overweight rating and is positive on Hematide, their lead drug, to treat anemia.
OTHER INITIATIONS:
Morgan Stanley initiated Emmis Communications Corp (NASDAQ: EMMS) with an Equal-Weight rating and $10 target.
Nollenberger started LSI Logic Corp (NYSE: LSI) with a Neutral rating and $10 target; they believe it will take several quarters for the LSI-Agere business plan to pan out.
Morgan Keegan believes shares of Buffalo Wild Wings Inc (NASDAQ: BWLD) are fairly valued, starting the company with a Market Perform rating.
MOST NOTEWORTHY: The trucking sector, PepsiCo (PEP) and Electronic Arts (ERTS) were the most notable upgrades today.
Wachovia upgraded the trucking sector to Market Weight from Underweight, as they believe the negative sentiment towards the group is starting to bottom, also noting that trucking stocks tend to rally before fundamentals fully bottom. Wachovia upgraded Con-Way Inc (NYSE: CNW) and Covenant Transport 'A' NASDAQ: CVTI) to Outperform from Market Perform, and Arkansas Best (NASDAQ: ABFS), Heartland Express Inc (NASDAQ: HTLD), Werner Enterprises (NASDAQ: WERN), US Xpress Enterprises 'A' (NASDAQ: XPRSA) to Market Perform from Underperform.
JP Morgan added PepsiCo (NYSE: PEP) to their Focus List, as the firm believes the recent pullback due to concerns over commodities costs and margins is overdone.
Janco upgraded Electronic Arts (NASDAQ: ERTS) to Buy from Hold with a $69 target, citing valuation.
OTHER UPGRADES:
Amgen Inc (NASDAQ: AMGN) was upgraded to Outperform from Peer Perform with a $77 target at Bear Stearns; the firm views Amgen's risk/reward as favorable as the most reasonable of CERA's launch scenarios, owned by Roche Holdings AG (OTC: RHHBY), are priced into valuation, and sees significant upside if CERA does not launch.
Caris upgraded LSI Logic (NYSE: LSI) to Buy from Above Average with a $12 target; they believe investors are underestimating the synergies involved with the Agere Systems (NYSE: AGR) deal. The broker sees upside to earnings estimates and raised their target of LSI Logic to $12 from $11.
Merrill Lynch upgraded shares of ImClone Systems (NASDAQ: IMCL) to Neutral from Sell, and sees a short-term trading opportunity due to the overly negative sentiment into the upcoming sales figures. The broker thinks Imclone could meet its Erbitux sales estimates despite weak prescription data.
Here are some highlights from this past week's earnings coverage from BloggingStocks: 
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a new $500 million stock repurchase program, the sale of semiconductor assembly and test operations in Thailand, the acquisition of fabless chip producer Tarai, new product announcements, and generally favorable analyst commentary. Shares have been advancing through a positive trading channel. The price is currently positioned at the base of that channel, suggesting the potential for a turn back toward the top.
MOST NOTEWORTHY: The Coca-Cola Co (KO), Merck & Co (MRK) and National Semiconductor (NSM) were some of today's more notable upgrades: 
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