Analyst Upgrades

• Thoratec (THOR) to buy from neutral at UBS.
• TW Telecom (TWTC) to buy from hold at Citigroup.
• TAL Education (XRS) to overweight from neutral at Piper Jaffray.
• Amedisys (AMED) to buy from hold at Deutsche Bank.

Analyst Downgrades

• Navigators (NAVG) to neutral from outperform at Macquarie.
• El Paso Electric (EE) to hold from buy at Jefferies.
• Hancock Holding (HBHC) to hold from buy at Wunderlich.
• California Water Service (CWT) and American States Water (AWR) to neutral from buy at Janney Capital.
• Mednax (MD) to hold from buy at Deutsche Bank.

Analyst Upgrades

• Citigroup upgraded Colgate (CL) and Phillips-Van Heusen (PVH) to buy from hold.
• Wells Fargo upgraded IDACORP (IDA) to outperform from market perform.
• Union Pacific (UNP) was upgraded to outperform from neutral at RW Baird.
• Goldman upgraded Quicksilver (KWK) to neutral from sell.
• Republic Airways (RJET) was upgraded to buy from hold at Deutsche Bank.
• BofA/Merrill upgraded GAMCO Investors (GBL) to neutral from underperform.
• Senior Housing (SNH) was upgraded to outperform from market perform at JMP Securities.

Republic Airways Holding Inc. (NASDAQ: RJET) is going shopping. Only a day after making an offer for ailing Frontier Airlines (OTC: FRNTQ), it has made a bid to nab Midwest Airlines from private equity firm TPG Capital. The offer consists of $6 million in cash and a note for another $25 million. If the private equity house takes the deal, Republic will get 100% of Midwest's equity and TPG's secured note of $31 million.

The $25 million in debt is convertible to RJET stock at $10 a share, which gives TPG a bit more upside from the transaction. The seller would also have the right to nominate a member of the buyer's board of directors.

Of course, Republic's CEO, Bryan Bedford, is upbeat about the prospect of buying Midwest Airways, saying it will "enhance the strategic positioning" of his company. Like the proposed acquisition of Frontier, Midwest would continue to operate under its own name, though the target's Boeing 717s would be replaced with Embraer 190s.

While the airports are still dominated by the big players, a company like Republic Airways Holdings Inc. (NASDAQ: RJET) offers essential services that make this company a real winner for investors.

Republic is the fastest-growing regional airline in America, with its lines (Chautauqua, Republic, and Shuttle America) providing regional service to bring passengers to the bigger airlines' hubs.

After a major downturn following 9/11, air travel is back up in a big way, and much of it is from the smaller regional airports that Republic serves. More and more people are looking to the skies for their business travel, and the growing number of telecommuters may also create increased demand for once-a-week flights from smaller cities to larger ones, rather than the traditional daily commute by car or public transportation.

MOST NOTEWORTHY: Chittenden Corp (CHZ), Digital River (DRIV), Image Entertainment (DISK) and Foot Locker (FL) were today's noteworthy downgrades:

• Chittenden Corp (NYSE: CHZ) was downgraded to Sell from Hold at AG Edwards based on the buyout news from People's United Financial (PBCT).

• Digital River (NASDAQ: DRIV) was downgraded to Hold from Buy, and its target was cut to $44, at Jeffries based on the weak Microsoft (MSFT) ramp and weakness in the Symantec (SYMC) transition.

• SMH Capital downgraded shares of Image Entertainment (NASDAQ: DISK) to Sell from Neutral and recommends investors take profits on the upside and sell shares.

• Foot Locker (NYSE: FL) was downgraded to Hold from Buy at Matrix, as the firm believes fundamentals trends are turning negative; the firm sees limited upside from current levels.

OTHER DOWNGRADES:

• Bed Bath & Beyond (NASDAQ: BBBY) was downgraded to Market Perform from Outperform at Raymond James.

• Johnson & Johnson (NYSE: JNJ) was removed from Goldman Sachs' Americas Conviction Buy List.

• Web.com (NASDAQ: WWWW) was downgraded to Hold from Buy at Roth Capital Partners.

• Andrew Corp (NASDAQ: ANDW) was downgraded to Neutral from Buy at Oppenheimer.

• JP Morgan downgraded shares of SkyWest (NASDAQ: SKYW) to Underweight from Overweight and shares of Republic Airways Holdings (NASDAQ: RJET) to Neutral from Overweight.

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