Analyst upgrades:

• Jefferies upgraded Ansys (NASDAQ: ANSS) shares to Buy from Hold following the company's reduced guidance as it now believes estimates are much more achievable. Despite the upgrade, the firm lowered its target price to $25 from $29.
  
• Deutsche Bank upgraded shares of Signet Jewelers (NYSE: SIG) to Buy from Hold on expectations the company will benefit from a capacity reduction in U.S. jewelry retailing.
  
• Thomas Weisel upgraded Omnicare (NYSE: OCR) to Overweight from Market Weight citing improving fundamentals and misunderstandings regarding Obama's healthcare proposal.
• Verizon (VZ) was lifted to Outperform from Sector Perform at RBC Capital.
  
• The Inventure Group (NYSE: SNAK) was raised to Buy from Hold at Roth Capital.
  
• Chico's FAS (NYSE: CHS) was upgraded at Friedman Billings to Outperform from Market Perform.

Analyst downgrades:

• Stephens downgraded Wilbros Group (NYSE: WG) to Equal Weight from Overweight to reflect a lack of visibility into earnings and deterioration in the company's end markets. The firm lowered its target price to $9.
• Jefferies downgraded Limelight Networks (NASDAQ: LLNW) to Hold from Buy as it believes the company can not sustain profits or cash flow this year given its capex requirements. The firm lowered its target price to $3 from $4.
  
• Barclays cut SLM Corp (NYSE: SLM) to Equal Weight from Overweight following President Obama's proposal to eliminate Federal Family Education Loan Program.
• Synta Pharma (NASDAQ: SNTA) was lowered to Hold from Buy at Roth Capital and to Sector Perform from Outperform at RBC Capital.
  
• U.S. Cellular (NYSE: USM) was downgraded at Baird to Underperform from Neutral.
  
• Paychex (NASDAQ: PAYX) was downgraded to Sell from Neutral at Goldman.

Analyst initiations:

• ThinkEquity expects Emulex (NYSE: ELX) to generate positive FCF in 2010 and views valuation as attractive. Shares were initiated with a Buy rating and $7 target.
  
• Lazard Capital initiated Constant Contact (NASDAQ: CTCT) with a Buy rating and $19 target. The firm believes the company is well positioned in the Software as a Service category of E-mail Marketing.
• Morgan Stanley assumed Dollar Tree (NASDAQ: DLTR) with an Overweight rating and $45 target and Family Dollar (NYSE: FDO) with an Equal Weight rating.
  
• Regal Entertainment (NYSE: RGC) was started at Barclays with an Overweight rating and $14 target.

Analyst upgrades:

• Jefferies upgraded Sonus Networks (NASDAQ: SONS) to Buy from Hold on valuation as they find the risk/reward compelling at current levels. Jefferies has a $2 target on the stock.
  
• Dresdner upgraded HSBC (NYSE: HBC) to Buy from hold on valuation as they believe the dividend cut is fully priced in at current levels.
  
• JP Morgan upgraded Barnes & Noble (NYSE: BKS) to Neutral from Underweight on valuation as they recommend short positions take profits at current levels.
• Kellogg (K) was raised to Buy from Neutral at UBS.
  
• RPM, Inc (NYSE: RPM) and Valspar (NYSE: VAL) were upgraded at KeyBanc to Buy from Hold.
  
• Omnicare (NYSE: OCR) was upgraded to Overweight from Equal Weight at Barclays.

Analyst downgrades:

• Jefferies downgraded Dune Energy (AXE: DNE) to Underperform from Hold to reflect weak commodity prices and the company's reduced financial flexibility. The firm lowered its target price to 10c from 30c.
• Baird downgraded NeuStar (NYSE: NSR) to Neutral from Outperform and lowered their target to $20 from $22 based on 2009 revenue concerns and the CFO's departure.
  
• UBS cut Viacom (NYSE: VIA) to Neutral from Buy and lowered its target to $18 from $27. The firm believes advertising declines will be worst than expected and that Film expectations are too high.
• Goldcorp (NYSE: GG) was lowered to Neutral from Overweight at JP Morgan.
  
• Kindred Healthcare (NYSE: KND) and Tenet Healthcare (THC) were downgraded at Barclays to Equal Weight from Overweight.
  
• Cynosure (NASDAQ: CYNO) was downgraded to Hold from Buy at Citigroup.

Analyst initiations:

• Keefe Bruyette believes Blackstone's (NYSE: BX) operating results and cash flow generation are likely to remain depressed well into 2009 given the weakening economy. The firm started shares with a Market Perform rating and $6 target.
  
• Oppenheimer views Brinks (NYSE: BCO) as a pure-play secure logistics company and feels it is well positioned to take advantage of a recent decline in acquisition prices. The firm has an Outperform rating and $32 target on the stock.
• Kellogg (NYSE: K) was initiated with a Buy rating and $52 target at Janney Montgomery.
• Avery Dennison (NYSE: AVY) was started at Barclays with an Equal Weight rating.
• Medco Health (NYSE: MHS) was initiated with a Market Perform rating and $59 target at Bernstein.

Analyst upgrades:

• Goldman upgraded Nokia (NYSE: NOK) to Neutral from Sell on valuation and believes the company's guidance is realistic.
  
• SMH Capital upgraded GMX Resources (NASDAQ: GMXR) to Accumulate from Neutral and is positive on the company's capex reduction.
  
• Wachovia raised Nationwide Health Services (NYSE: NHP) to Outperform from Market Perform to reflect the company's diversified portfolio and "solid" capital position.
• Portugal Telecom (NYSE: PT) was upgraded to Equal Weight from Underweight at Morgan Stanley.
  
• Omnicare (NYSE: OCR) was upgraded to Buy from Hold at Soleil.
  
• SKF AB (OTC: SKFRY) was upgraded at JP Morgan to Neutral from Underweight.

Analyst downgrades:

Analyst upgrades:

• Jefferies upgraded shares of Omnicare (NYSE: OCR) to Buy from Hold and raised their target to $37 from $24.50 following the company's Q2 results to reflect improving earnings visibility.
  
• Piper upgraded Motorola (NYSE: MOT) to Neutral from Sell following the company's Q2 results to reflect its continued execution in cost management. The firm raised its target to $9 from $7.
  
• Capital One Southcoast upgraded Patterson-UTI Energy (NASDAQ: PTEN) to Add from Neutral based on additional new builds already under contract and rig reactivations. The firm raised its target to $36 from $32.

Analyst downgrades:

• Citigroup downgraded shares of ImClone (NASDAQ: IMCL) to Hold from Buy despite thinking the initial offer from Bristol Myers (BMY) will be raised, as they do not advise chasing shares at current levels. The company's target was raised to $73 from $56.
• First Mercury (NYSE: FMR) and Monster (NASDAQ: MNST) were downgraded at JP Morgan to Neutral from Overweight.
  
• Jefferies lowered Osiris Therapeutics (NASDAQ: OSIR) to Underperform from Hold.

Analyst initiations:

• Morgan Keegan initiated Cicso Systems (NASDAQ: CSCO) with a Market Perform rating, citing the difficult macro environment; the firm believes 2H08 estimates will come down.
  
• Banc of America reinstated coverage of MF Global (NYSE: MF) with a Buy rating and $8.36 target.

MOST NOTEWORTHY: Omnicare, Coca-Cola and OptionXpress were today's noteworthy upgrades:

• Oppenheimer upgraded Omnicare (NYSE: OCR) to Outperform from Perform citing their analysis that indicates the Rx market is stronger than expected in the LTC channel, which is largely overlooked by investors due to the legacy focus on beds. The firm expects solid Q2 results will increase confidence in the company's ability to achieve mid-point or better EPS guidance.
  
• Deutsche upgraded Coca-Cola (NYSE: KO) to Buy from Hold based on favorable currency impact, international growth, and valuation.
  
• OptionXpress (NASDAQ: OXPS) was raised at Merriman to Neutral from Sell as they see little downside to risk estimates, following several rounds of cuts, and valuation.

OTHER UPGRADES:

• Fresh Del Monte (NYSE: FDP) was upgraded to Outperform from Market Perform at Wachovia.
  
• JP Morgan upgraded Kellogg (NYSE: K) to Overweight from Neutral.
  
• Delta Petroleum (NASDAQ: DPTR) and St. Mary Land & Exploration (NYSE: SM) were upgraded at Merrill to Buy from Underperform.

MOST NOTEWORTHY: Ford, DealerTrack and Omnicare were today's noteworthy downgrades:

• Citigroup downgraded shares of Ford (NYSE: F) to Sell from Hold, as they see a number of rising headwinds in the company's turnaround, including a low likelihood of Ford's relatively older product lineup holding U.S. share in the first half of 2008.
• Lehman downgraded DealerTrack (NASDAQ: TRAK) to Equal Weight from Overweight citing near-term headwinds from economic uncertainty, declining auto sales, declining growth, and non-prime transaction risk.
  
• Oppenheimer downgraded shares of Omnicare (NYSE: OCR) to Perform from Outperform to reflect concerns over the timing and pace of a potential recovery.

OTHER DOWNGRADES:

• Banco Bilbao Vizcaya Argentaria (NYSE: BBV) was lowered to Hold from Buy at Deutsche Bank.
  
• Mediaset SpA (OTC: MDIUY) was downgraded to Sell from Neutral at UBS.
  
• Western Digital (NYSE: WDC) was cut to Underweight from Neutral at JP Morgan.

MOST NOTEWORTHY: Omnicare, Masco, Smart Modular and VASCO Data Security were today's noteworthy downgrades:

• Matrix downgraded shares of Omnicare (NYSE: OCR) to Hold from Buy to reflect the company's very weak performance and higher than average risk.
• Merrill Lynch downgraded Masco Corp (NYSE: MAS) to Sell from Neutral to reflect expectations for a decline in U.S. housing starts and remodeling in 2008. The broker recommends swapping into Texas Industries (NYSE: TXI).
• Smart Modular (NASDAQ: SMOD) was downgraded to Market Outperform from Strong Buy at JMP Securities following the Q4 pre-announcement.
• VASCO Data Security (NASDAQ: VDSI) was downgraded to Market Perform from Outperform at Friedman Billings on valuation.

OTHER DOWNGRADES:

• RAIT Financial Trust (NYSE: RAS) was downgraded to Underperform from Sector Perform at RBC Capital.
• KMG America (NYSE: KMA) was downgraded to Market Perform from Outperform at Friedman Billings on valuation.

MOST NOTEWORTHY: Bear Stearns, Omnicare, Kforce.com and Wyeth were today's noteworthy downgrades:

• Bear Stearns Companies (NYSE: BSC) was downgraded to Neutral from Buy at Banc of America to reflect weaker fixed income trends, challenges in prime-brokerage and asset management, and no positive catalysts. They feel the stock is "dead money" for the next 6-12 months.
  
• Morgan Stanley lowered Omnicare Inc's (NYSE: OCR) rating to Underweight from Equal Weight citing the Department of Justice's inquiry into the company's business practices.
• Suntrust believes Street expectations for Kforce Inc (NASDAQ: KFRC) may be too optimistic given a potential slowdown in finance and accounting temporary staffing volumes and downgraded shares to Neutral from Buy.
• Wyeth (NYSE: WYE) was downgraded to Hold from Buy at Citigroup to reflect a more negative industry outlook, recent pipeline setbacks and the negative court ruling related to the Protonix litigation.

OTHER DOWNGRADES:

• EMC Corporation (NYSE: EMC) was removed from Goldman's Conviction Buy List.
• Stanford downgraded shares of Alabama National Bancorp (NASDAQ: ALAB) to Hold from Buy.
• Computer Sciences Corporation (NYSE: CSC) was downgraded to Hold from Buy at Sandler.

First came its acquisition of Take Care Health Systems. Then, an announcement that Walgreen Company (NYSE: WAG) was planning to acquire Option Care, Inc (NASDAQ: OPTN). Next...?

Bank of America analysts are speculating that geriatric pharmaceutical services company Omnicare, Inc (NYSE: OCR) could eventually be on Walgreens' acquisition radar.

Walgreens acquired Take Care and is planning to acquire specialty pharmacy services provider Option Care in an effort to grow its health care operations and to provide patient-focused health care services. Walgreens has estimated the market for these operations is around $60 billion a year and has a projected annual growth rate of 20%. Analysts believe that for this very reason, Walgreens take a closer look or two at Omnicare, which provides its pharmacy services to long-term care and chronic-care facilities in 47 states throughout the U.S.

Omnicare recently began legal proceedings against 16 drug benefit plans and health insurers, after alleging it has been burdened with "inappropriate" co-payments and rejected payment claims; the company is seeking to collect $61 million it believes is due. The analysts believe Walgreens won't show interest in Omnicare unless it retains its leading market share in the institutional pharmacy sector while addressing pertinent issues like balance sheet challenges and cost structure. Should these legal issues clear, Walgreens may ultimately find Omnicare more attractive.

MOST NOTEWORTHY: Take-Two Interactive Software Inc (TTWO), Circuit City Stores Inc (CC) and Exxon Mobil Corp (XOM) are today's more notable downgrades:

• Both Soleil and Citigroup downgraded Take-Two Interactive Software Inc (NASDAQ: TTWO) to Sell from Hold following the company's earnings shortfall and reduced guidance.

• Piper Jaffray downgraded Circuit City Stores Inc (NYSE: CC) to Market Perform from Outperform and a $20 target, based on checks that indicate weak sales trends following Christmas.

• AG Edwards removed Exxon Mobil Corp (NYSE: XOM) from its Focus Portfolio, believing the company offers less upside potential than other companies in the energy sector...

OTHER DOWNGRADES:

• Harrah's Entertainment Inc (NYSE: HET) was cut to Neutral from Buy at Buckingham Research.

• Sasol Limited ADR (NYSE: SSL) was downgraded to Hold from Buy at Citigroup based on the persistent regulator risk.

• ThinkEquity cut Syniverse Holdings Inc (NYSE: SVR) to Source of Funds from Accumulate citing expectations for increased competition and price pressures.

• Citigroup downgraded Barr Pharmaceuticals Inc (NYSE: BRL) to Hold from buy.

• First Albany cut Shuffle Master Inc (NASDAQ: SHFL) to Neutral from Buy.

• Jefferies downgraded Omnicare Inc (NYSE: OCR) to Hold from Buy with a $44 target.

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

MOST NOTEWORTHY: DreamWorks Animation (DWA) and Omnicare (OCR) led a moderate upgrade list Wednesday morning, as the Dow and Nasdaq both moved higher in early trading.

• Jefferies upgraded DreamWorks Animation, Inc. (NYSE:DWA) to Buy from Hold, target to $31.50, citing the company's 2007 film slate.
• Bear Stearns upgraded Omnicare, Inc. (NYSE:OCR) to Outperform from Peer Perform, with a $50 target, due to Tuesday's sell-off and valuation.
• Goldman Sachs upgraded Baidu.com, Inc. (NASDAQ:BIDU) to Neutral from Sell, target is $93, citing BIDU's Q3 report and conservative estimates.
• Wachovia upgraded Chipolte Mexican Grill, Inc. (NYSE:CMG) to Market Perform from Underperform, citing a better-than-expected Q3 report; the firm also has a $55-$61 valuation range for CMG.

OTHER UPGRADES:

• Citigroup upgraded Charter Communications (NASDAQ:CHTR) to Buy from Hold.

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