Analyst upgrades:

• Citigroup upgraded Polaris Industries (NYSE: PII) to Buy from Hold after channel checks indicated the company's sales trends improved through September. The firm raised its target on shares to $49 from $33.
• Jefferies upgraded Citrix Systems (NASDAQ: CTXS) to Hold from Underperform after channel checks indicated IT spending will be strong in the second half of 2009, but the firm finds the stock fully valued at current levels. Jefferies raised its target on shares to $40 from $32.
• Pali Captital upgraded Abercrombie & Fitch (NYSE: ANF) to Buy from Neutral on valuation and expectations that lower pricing and international growth will be catalysts going forward. The firm set a $45 price target on shares.
• Plum Creek Timber (NYSE: PCL) was upgraded to Neutral from Underweight at JPMorgan.
• Advanced Micro (NYSE: AMD) was upgraded to Buy from Neutral at UBS.
• PPD Inc. (NASDAQ: PPDI) was upgraded to Outperform from Neutral at Baird.

Relatively low-profile paint-supplier Sherwin-Williams (NYSE: SHW) certainly isn't the sexiest company. But hey, in this economy, somber but steady profits are just fine, thank you.

The company is on-schedule to benefit from a stabilizing U.S. housing sector. (And given the housing sector's pronounced recession over the past three years, signs of stabilization represent a considerable improvement, from a supplier industry standpoint.)

Sherwin-Williams (NYSE: SHW) closed at $53.73. SHW is expected to report Q2 EPS on July 21. SHW options were active on 11,569 contracts. SHW July option implied volatility is at 35, August is at 39; below its 26-week average of 43, according to Track Data, suggesting decreasing price movement.

Wyndham (NYSE: WYN) closed at $11.02 WYN is expected to report Q2 EPS on July 29. WYN options were active on July 6 with 17,333 contracts trading. WYN July option implied volatility is at 70, August is at 68; below its 26-week average of 98 according to Track Data, suggesting decreasing price movement.

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

Just call paint manufacturer giant Sherwin-Williams Co. (NYSE: SHW) an anticipatory play.

Here, the play concerns the argument that analysts have projected an overly negative performance for SHW in F2009. Most see a 5 to 10% revenue decline, due to a contracting home sector, which has weighed on paint sales.

Analyst upgrades:

• Janney Montgomery upgraded Aqua America (NYSE: WTR) to Buy from Neutral on valuation, viewing the recent weakness as a buying opportunity. The firm has a $19 target on the stock.
• UBS upgraded Gildan Activewear (NYSE: GIL) to Buy from Neutral due to customer Broder's improved liquidity and the improved outlook for margins.
• RBC Capital upgraded State Street (NYSE: STT) to Top Pick from Outperform and raised its target to $55 from $40. The analyst said the $2B capital raise addresses TCE ratio concerns and large unrealized losses in the investment portfolio.
• Sherwin-Williams (NYSE: SHW) was upgraded to Overweight from Neutral at JP Morgan.
• Advance Auto Parts (NYSE: AAP) was upgraded to Buy from Underperform at Banc of America/Merrill.
• M&T Bank (NYSE: MTB) was upgraded to Outperform from Market Perform at Bernstein.

Alcoa Inc. (NYSE: AA) started off the new earnings season with disappointing results that helped to stifle the recent rally. Was that enough of a sign of what's to come? No, probably not. But the earnings reports start to fly in earnest this week, which should provide a more detailed picture of the state of things.

Analysts surveyed by Thomson Reuters anticipate that some of the biggest names will prove to be holding their own. Google Inc. (NASDAQ: GOOG) is expected to post a profit of $4.91 per share, marginally higher than a year ago, and Johnson & Johnson's (NYSE: JNJ) expected $1.22 per share profit is slightly lower year over year. Even Mattel Inc.'s (NYSE: MAT) estimated loss of $0.13 per share is the same as in the year-ago period.

Analyst upgrades:

• Calyon upgraded major network carriers based on falling oil prices and capacity cuts. The analyst is positive over the next 12 months but cautious short-term given the uncertain economy, and volatile markets and oil prices. AMR Corp (NYSE: AMR) and Delta Air (NYSE: DAL) were upgraded to Add from Neutral and UAL Corp (NASDAQ: UAUA) was raised to Neutral from Reduce.
• Ryanair (NASDAQ: RYAAY) was upgraded at Citigroup to Buy from Hold.
• Boardwalk Pipeline (NYSE: BWP) was raised to Buy from Hold at Deutsche Bank.
• Cowen lifted Biogen Idec (NASDAQ: BIIB) to Outperform from Neutral.
• JP Morgan upgraded Choice Hotels (NYSE: CHH) to Neutral from Underweight following the better-than-expected Q3 report.
• Oppenheimer upgraded shares of Integra LifeSciences (NASDAQ: IART) to Outperform from Perform on valuation, the company's minimal exposure to economic conditions, and expectations for margin improvement and a rebound in organic growth.

Analyst downgrades:

• Sherwin-Williams (NYSE: SHW) and AerCap Holdings (NYSE: AER) were downgraded to Neutral from Overweight at JP Morgan.
• UBS downgraded Embarq (NYSE: EQ) to Neutral from Buy following the CenturyTel (NYSE: CTL) merger announcement.

As the second quarter earnings crunch begins in earnest this week, the bear market has investors jittery and prognosticators spinning out dire warnings. In the wake of mixed results from Alcoa (NYSE: AA) and General Electric (NYSE: GE) kicking things off last week, here's a look at what Wall Street is expecting from many of the companies scheduled to report this coming week.

Analysts surveyed by Thomson Financial are expecting the following companies to report a rise in earnings when compared to the same period of the previous year.

• Nucor Corp. (NYSE: NUE): $1.80 EPS (36.6%) on sales of $6.4 billion (+53.0%)
• Google Inc. (NASDAQ: GOOG): $4.74 EPS (24.9%) on sales of $3.9 billion (+41.6%)
• Nokia Corp. (NYSE: NOK): 56 cents EPS (23.2%) on sales of $19.9 billion (+17.8%)
• CSX Corp. (NYSE: CSX): 90 cents EPS (21.1%) on sales of $2.9 billion (+12.8%)
• Altera Corp. (NASDAQ: ALTR): 27 cents EPS (18.5%) on sales of $346.7 million (+8.4%)
• IBM (NYSE: IBM): $1.82 EPS (+17.6%) on sales of $25.9 billion (+9.0%)
• eBay Inc. (NASDAQ: EBAY): 41 cents EPS (17.1%) on sales of $2.2 billion (+18.0%)
• W.W. Grainger Inc. (NYSE: GWW): $1.46 EPS (17.1%) on sales of $1.7 billion (+8.0%)
• Microsoft Corp. (NASDAQ: MSFT): 47 cents EPS (17.0%) on sales of $15.7 billion (+17.0%)
• Honeywell International Inc. (NYSE: HON): 94 cents EPS (17.0%) on sales of $9.2 billion (+7.9%)

Sherwin-Williams (NYSE: SHW) shares are trading higher today after the Rhode Island Supreme Court overturned a $2.4 billion ruling against SHW and two other former lead-paint producers that would have ordered the companies to inspect and clean thousands of homes built before 1980 that were likely to contain lead paint. If you think that the stock won't fall by too much in the coming months, then now could be a good time to look at a bullish hedged trade on SHW.

After hitting a one-year high of $73.96 last July, the stock hit a one-year low of $45.89 yesterday. SHW opened this morning at $48.29. So far today the stock has hit a low of $45.82 and a high of $48.86. As of 11:55, SHW is trading at $47.36, up $1.43 (3.1%). The chart for SHW looks bearish and steady, while S&P gives the stock a neutral 3 Stars (out of 5) Hold rating.

For a bullish hedged play on this stock, I would consider an August bull-put credit spread below the $40 range. A bull-put credit spread is an options position that combines the purchase and sale of put options to hedge risk in case the stock doesn't do what you think but still leverage nice returns. For this particular trade, we will make a 7.5% return in just seven weeks as long as SHW is above $55 at August expiration. Sherwin-Williams would have to fall by more than 15% before we would start to lose money. Learn more about this type of trade here.

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

• Bob Evans Farms Inc. (NASDAQ: BOBE) posted stronger-than-expected Q4 earnings.
• Ciena Corp. (NASDAQ: CIEN) beat earnings expectations, but share prices slipped anyway.
• Daktronics Inc. (NASDAQ: DAKT) Q4 results beat expectations and it raised its revenue outlook.
• Diageo (NYSE: DEO) is recession-proof and should deliver solid results, predicts one adviser.
• Donaldson Company Inc. (NYSE: DCI) beat Q3 expectations and raised its full-year guidance.
• Ensco International Inc. (NYSE: ESV) was upgraded because of its earnings growth potential.
• Lehman Brothers Holdings Inc. (NYSE: LEH) earnings prospects don't impress Jim Cramer.
• Netezza Corp. (NYSE: NZ) beat Q1 expectations and offered full-year revenue guidance.
• Potash Corp. (NYSE: POT) earnings are "set to soar" says one analyst, due to rising demand and prices.
• Sherwin-Williams Co. (NYSE: SHW) lowered its Q2 and full-year forecasts, sending shares down.
• Take-Two Interactive Software Inc. (NASDAQ: TTWO) beat Q2 estimates on Grand Theft Auto IV demand.
• Trina Solar Ltd. (NYSE: TSL) beat Q1 estimates but shares fell on the disappointing Q2 outlook.
• Wal-Mart Stores Inc. (NYSE: WMT) was upgraded due to its earnings outlook and increased productivity.

See also: Earnings highlights: Toll Bros., National Semiconductor, Dr Pepper, Guess and others

Also, continued real estate losses are expected to hurt the quarterly reports of banks such as like Wachovia (NYSE: WB), Wells Fargo (NYSE: WFC), and National City (NYSE: NCC). And Steven Mallas wonders why Playboy (NYSE: PLA) shares have tanked since its last earnings report.

Upcoming results to watch for include Krispy Kreme (NYSE: KKD), Pall Corp. (NYSE: PLL), Pep Boys (NYSE: PBY), Korn Ferry (NYSE: KFY), and Casey's General Stores (NASDAQ: CASY).

Visit AOL Money & Finance for more earnings coverage.

MOST NOTEWORTHY: PHH Corp., VF Corp. and Dialysis Corp. of America were today's noteworthy initiations:

• PHH Corp (PHH) was initiated with an Outperform rating and $25 target at Keefe Bruyette. The firm finds the stock inexpensive at current levels and believes the company's management team is strong and mortgage operations are improving.
  
• Baird is positive on VF Corp's (VFC) sales and EPS growth, brand portfolio strength, and global distribution opportunities. Shares were assumed with an Outperform rating and $90 target.
  
• Stanford started Dialysis Corp of America (DCAI) with a Buy rating and $10 target and believes the company is worth more to a strategic buyer, which they feel could drive revenue per treatment and margins higher.

OTHER INITIATIONS:

• Merrill initiated Sherwin-Williams (SHW) with an Underperform rating.
  
• Vail Resorts (MTN) was assumed with a Buy rating and $59 target at Banc of America.
  
• Goldman started Patterson-UTI Energy (PTEN) with a Neutral rating and $35 target.

Sherwin-Williams (NYSE: SHW) shares are falling after the company cut its second-quarter earnings estimate to between $1.40 and $1.50 per share, down from a range of $1.45 to $1.60 per share. SHW also cut its FY2008 forecast to a range of $3.60 to $4.10 per share, down from a range of $4.70 to $4.85 per share. If you think this stock won't be rising too far in the coming months, then it could be a good time to look at a bearish hedged play on SHW.

After hitting a one-year high of $55.90 last April, the stock hit a one-year low of $33.54 in January. This morning, SHW opened at $51.73. So far today the stock has hit a low of $51.68 and a high of $54.80. As of 12:15, SHW is trading at $54.34, down $1.35 (-2.4%). The chart for SHW looks bullish and steady, while S&P gives the stock a bullish 4 Stars (out of 5) Buy rating.

For a bearish hedged play on this stock, I would consider a July bear-call credit spread above the $60 range. A bear-call credit spread is an options position that combines the purchase and sale of call options to hedge risk in case the stock doesn't do what you think but still leverage nice returns. For this particular trade, we will make a 12.4% return in seven weeks as long as SHW is below $60 at July expiration. Sherwin Williams would have to rise by more than 10% before we would start to lose money. Learn more about this type of trade here.

MOST NOTEWORTHY: Full House Resorts, Starent Networks and Capital Trust were today's noteworthy initiations:

• Morgan Joseph said Full House Resorts Inc.'s (AMEX: FLL) valuation does not reflect the present value of its tribal management contract with the FireKeepers Casino. Shares were initiated with a Buy rating and $3.50 target.
• Starent Networks Corporation (NASDAQ: STAR) was assumed with an Overweight rating at Thomas Weisel. The firm said STAR offers a compelling risk/reward profile given strong gross margins and expanding operating margins.
• Keefe Bruyette initiated Capital Trust Inc. (NYSE: CT) with a Market Perform rating and $30 target, and believes the expected deterioration of commercial real estate fundamentals is likely to remain a headwind for valuations of the shares.

OTHER INITIATIONS:

• Thomson Reuters Plc. (NASDAQ: TRIN) was started at UBS with a Neutral rating.
• Piper initiated Heritage-Crystal Clean Inc. (NASDAQ: HCCI) with a Buy rating and $20 target.
• Goldman Sachs initiated The Sherwin-Williams Company (NYSE: SHW) with a Neutral rating.

MOST NOTEWORTHY: WuXi Pharma, ExxonMobil and LifePoint Hospitals were today's noteworthy upgrades:

• Jefferies upgraded shares of WuXi Pharma (NYSE: WX) to Buy from Hold as they believe the risk/reward is much improved following the recent weakness. They think the company's 2008 guidance is achievable.
  
• Credit Suisse raised ExxonMobil (NYSE: XOM) to Outperform from Neutral as they believe the rise in crude oil means analyst estimates are too low.
  
• Goldman sees upside to hospital stocks given low valuations and expectations. The firm upgraded LifePoint Hospitals (NASDAQ: LPNT) to Buy from Neutral and named it a top pick along with previous top pick Cardinal Health (NYSE: CAH).

OTHER UPGRADES:

• Goldman added NDS Group (NASDAQ: NNDS) to their Conviction Buy List and upgraded shares to Buy from Neutral.
  
• Morgan Stanley raised Boeing (NYSE: BA) to Overweight from Equal Weight.
  
• JP Morgan added Sherwin-Williams (NYSE: SHW) to the Focus List.

The earnings crunch is in full swing, and here are a few of the highlights of this past week's earnings coverage from BloggingStocks:

• American Express Co. (NYSE: AXP) reported a slip in profits and warned of slow growth in 2008.
• Alberto-Culver (NYSE: ACV) returned to profitability after a spin-off and restructuring.
• Avnet Inc. (NYSE: AVT) beat expectations and offered a revised forecast.
• Black & Decker Corp. (NYSE: BDK) beat expectations but lowered its outlook due to the housing slump.
• Eastman Kodak Co. (NYSE: EK) fell short of earnings estimates, sending shares lower.
• Hershey Co. (NYSE: HSY) responded to disappointing results by announcing price increases.
• Kraft Foods Inc. (NYSE: KFT) fourth-quarter profit fell on higher costs for raw materials.
• Lenovo Group Ltd. (OTC: LNVGY) nearly tripled quarterly earnings on strong demand for PCs in Asia.
• MasterCard Inc. (NYSE: MA) beat expectations, even after excluding a one-time investment gain.
• McCormick & Co. (NYSE: MKC) posted solid results on strength in international markets.
• McDonald's Corp. (NYSE: MCD) beat expectations, but reported flat same-store sales in December.
• Procter & Gamble Co. (NYSE: PG) reported strong second-quarter results on strength in emerging markets.
• SanDisk Corp. (NASDAQ: SNDK) reported a profit but missed revenue expectations.
• Sherwin-Williams Co. (NYSE: SHW) missed estimates and lowered expectations for the next quarter.
• 3M Co. (NYSE: MMM) beat expectations despite a decline in profits.
• Tyson Foods Inc. (NYSE: TSN) profits fell and it announced a plan to raise prices.
• Verizon Communications Inc. (NYSE: VZ) met earnings estimates but fell short of revenue expectations.

For additional BloggingStocks earnings highlights, see Yahoo!, Google, Amazon, Countrywide, Merck, UBS and others and Exxon, Boeing, Halliburton, Sony, UPS, Honda and others.