Analyst upgrades:

• Deutsche Bank upgraded HealthSouth (NYSE: HLS) and Rehabcare (NYSE: RHB) to Buy from Hold after raising its Post Acute Care sector view to Positive from Neutral. The firm believes volumes and margin leverage can drive better than expected Q2 results and 2009 guidance. The firm raised its target on HealthSouth shares to $16 from $12 and on Rehabcare to $28 from $19.
  
• Jefferies upgraded Moody's (NYSE: MCO) to Hold from Underperform to reflect stabilizing credit markets and its belief regulatory concerns are overstated. The firm raised its target on shares to $30 from $19.
  
• Keefe Bruyette upgraded Goldman Sachs (NYSE: GS) to Outperform from Market Perform as it finds the stock inexpensive following the better than expected results. The firm has a $195 target on shares.
• Vale (NASDAQ: VALE) was upgraded to Buy from Neutral at BofA/Merrill.
  
• CNOOC (NYSE: CEO) was upgraded to Overweight from Equal Weight at Morgan Stanley.
  
• International Game Tech (NYSE: IGT) was upgraded to Buy from Neutral at Janney Montgomery.
  

Analyst upgrades:

• Jefferies upgraded Abercrombie & Fitch (NYSE: ANF) to Buy from Hold on a favorable risk/reward profile. The firm thinks sentiment is negative, estimate revisions have troughed, and compares ease in the second half of 2009. Jefferies upped its target price to $35 from $22.
• Citigroup upgraded Home Depot (NYSE: HD) to Buy from Hold on expectations for positive earnings surprises in 2009. The firm thinks home merchandise sales are picking up and consensus estimates could prove conservative. Citi raised its target price on the stock to $32 from $26.
• Bernstein upgraded Starwood Hotels (NYSE: HOT) to Market Perform from Underperform and raised their price target to $23 from $10 based on its credit agreement amendment and valuation.
• SunTrust (NYSE: STI) was upgraded to Neutral from Sell at Goldman. Fiat (OTC: FIATY) was upgraded to Buy from Neutral at UBS.
• Lincoln National (NYSE: LNC) was raised to Outperform from Market Perform at Wachovia.

MOST NOTEWORTHY: First Bancorp. and Volcom were today's noteworthy initiations:

• B. Riley initiated First Bancorp. (NYSE: FBP) with a Buy rating, citing the company's balance sheet growth, reduced expenses and strong capital base.
  
• Volcom Inc. (NASDAQ: VLCM) was also initiated with a Buy rating by B. Riley, as the firm believes the company can grow its business through further penetration into domestic markets, brand extension into new categories and increased demand for its brands.

OTHER INITIATIONS:

• Energy Solutions (NYSE: ES) was initiated with an Equal Weight rating by Morgan Stanley.
• Goldman Sachs started El Paso Pipeline (NYSE: EPB) with a Buy rating.
• 3PAR Inc. (NYSE: PAR) was initiated with an Outperform by RBC Capital Markets.

MOST NOTEWORTHY: Siemens AG (SI), Business Objects (BOBJ), Continental Airlines (CAL), Lawson Software (LWSN) and Trump Entertainment Resorts, Inc (TRMP) were today's noteworthy upgrades:

• Lehman upgraded shares of Siemens AG (NYSE: SI) to Overweight from Neutral reflect the potential major portfolio reorganization over the next few years as well as the strong momentum in the group.

• UBS upgraded shares of Business Objects (NASDAQ: BOBJ) to Buy from Neutral to reflect easy compares in Q2 and signs of improving underlying European demand.

• Soleil upgraded Continental (NYSE: CAL) to Buy from Hold as they believe better-than-expected June consolidated revenue growth suggests strong enough revenue momentum to offset above-average domestic capacity growth affecting its important Newark hub.

• Matrix upgraded Lawson Software (NASDAQ: LWSN) to Sell from Strong Sell to reflect increasing revenues from software licenses.

• Brean Murray upgraded shares of Trump Entertainment (NASDAQ: TRMP) to Buy from Hold citing recent share weakness, improving trends, potential monetization of excess real estate and the use of the Trump brand outside of Atlantic City...

OTHER DOWNGRADES:

• Northstar Realty Finance Corp (NYSE: NRF) was upgraded to Outperform from Market Perform at Wachovia.

• Goldman raised Par Pharmaceuticals' (NYSE: PRX) rating to Neutral from Sell.

• Bernstein upgraded Avon Products (NYSE: AVP) to Market Perform from Underperform.

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