Starbucks (SBUX) is set to have a good morning, as the company received an upgrade from UBS to buy from neutral. The brokerage also upped its earnings forecast for Starbucks to $1.14 per share in fiscal 2010, up from $1.09 per share. For 2011, UBS expects Starbucks to pull in $1.34 per share, seven cents better than the brokerage's earlier forecast. UBS believes that benign costs and Starbucks' ongoing productivity programs are key to the company's success. That said, UBS feels that McDonald's (MCD) foray into the world of frappes and smoothies could "cannibalize frappuccino consumers from Starbucks." Such a move could hurt Starbucks' bottom line.

Yum! Brands (YUM), a collection of restaurant chains operating in the same space as McDonald's (MCD) and Burger King (BKC), didn't post the most exciting earnings report last month, but it might not matter. Just recently, shareholders received a couple pieces of good news.

First, UBS offered inspiring comments about the company and the stock last week. Shares were upgraded to buy status, rising from neutral. A higher price target of $44 was issued. The catalyst basically centers on things getting better on a fundamental basis for the restaurant brands; also, China's sales appear to have stabilized.

Wendy's/Arby's Group (WEN) is a stock that really isn't for most investors (in my opinion). It's not what I would call a quality name. If you want to play the fast-food sector, you'd be better off with McDonald's (MCD) or Yum! Brands (YUM).

Burger King (BKC), although not my favorite member of the list, might also be a more attractive selection than Wendy's/Arby's Group. I don't mean to be down on the fast-food entity, but it just isn't in the same league as those other investment ideas. Plus, a look at the fourth-quarter report shows that management has quite a bit of work to do.

Yes, you read that title right. McDonald's (MCD) has just penned a deal with Weight Watchers (WTW) in New Zealand. The agreement will give McDonald's the right to associate the Weight Watchers logo with some Weight Watcher approved fast food items by including that logo on McDonald's menu boards and some other items.

A report from The Sydney Morning Herald indicates that some nutritionists and doctors are already raising concerns about the new marketing ploy. The report quotes Boyd Swinburn, from the Australian Society for the Study of Obesity at Deakin University, as stating, "Make no mistake, this is about selling more burgers and fries." Imagine that, a marketing strategy aimed at increasing sales. Someone needs to explain that concept to Mr. Swinburn.

A report in the China Daily states that McDonald's (MCD) is slashing its prices amid cutthroat competition in China. Additionally, the fast-food titan is accepting competitors' coupons as part of a month-long promotion meant to woo Chinese consumers from rivals such as KFC and Burger King (BKC).

Specifically, Mickey D's has dropped the price on its McWings from 7 yuan to 5 yuan, and it's offering an extra 10% off to any customer who presents a coupon for fried chicken wings from any competing restaurant. Company spokesman Ren Yuan said the aggressive promotion is the first of its kind since McDonald's landed on the Chinese mainland in 1990.

As the name suggests, Green Mountain Coffee Roasters (GMCR) is based in the pastoral state of Vermont. The company offers about 180 varieties of coffee, cocoa and tea, which it sells to wholesale customers including supermarkets, convenience stores, resorts and office-delivery services.

Some of its biggest customers are ExxonMobil's (XOM) convenience stores and McDonald's (MCD) restaurants. In September, Green Mountain acquired Tully's Coffee, which has been chipping away at Starbucks' (SBUX) dominance in the Pacific Northwest. Green Mountain Coffee's popular Keurig brewing system is also red-hot, with the increasing demand for specialty coffees in homes, restaurants and offices.

The editor of IQ Trends -- and author of the just-released book Dividends Still Don't Lie -- explains, "To that end we believe that high-quality stocks purchased at historically low-price-to-high-yield offers the best potential for downside protection and upside appreciation.

Burger King (BKC), which competes for the attention of fast-food junkies along with McDonald's (MCD), Wendy's/Arby's Group (WEN), and Yum! Brands (YUM), didn't do too badly when it came to bottom-line growth in the second quarter. Same-store sales, on the other hand, could have used a little assistance.

Earnings per share calculated out to 37 cents. That was good for a 12% increase. Great to see double-digit appreciation. However, domestic comps went down 3.3%, while total comps were off by 2%. The same-store sales metric is a very important indicator of the overall health of a business that has many locations.

Sales went down 1%, and earnings per share on an adjusted basis increased 7% to 50 cents. Earnings.com says 48 cents per share was the desired figure. Same-store sales in the United States decreased 8%.

Goldman Sachs has elevated McDonald's (MCD) to conviction buy from buy and upped its 12-month price target to $75 from $73.

According to the brokerage, McDonald's is weathering the current economic crisis thanks to a combination of positive same-store sales and accelerating margin gains. Goldman added that consensus estimates underappreciate this fact, which should bring about some upward earnings revisions during 2010.

Here are some highlights from this past week's earnings coverage on BloggingStocks:

• American Express Co. (AXP) doubled its bottom line in Q4 while its provisions for losses fell.
• Blockbuster Inc. (BBI) warned of weakness in Q4 and lowered its guidance, sending shares lower.
• Coach Inc. (COH) better-than-expected Q2 earnings were accompanied by sales growth, but shares fell.
• Comerica Inc. (CMA) posted a smaller-than-expected Q4 loss, sending shares to a 52-week high.
• CSX Corp. (CSX) posted Q4 earnings that topped estimates but its revenue fell short of expectations.

McDonald's (MCD) closed at $63.20. MCD is scheduled to report Q4 EPS on January 22. February and March put option implied volatility is at 18, June puts are at 20, versus its 26-week average of 20 according to Track Data, suggesting non-directional price movement.

Hansen Natural (HANS) closed at $40.53. HANS is expected to report Q4 EPS in late February. February option implied volatility is at 25, March is at 36, June is at 38, versus its 26-week average of 42, according to Track Data, suggesting decreasing price movement.

Option Update is provided by Stock Specialist Paul Foster of theflyonthewall.com.