Analyst Upgrades

• Deere (DE) to outperform from market perform at Wells Fargo.
• American Eagle (AEO) to buy from neutral at Janney Capital.
• FedEx (FDX) and Shaw (SJR) to outperform from neutral at Credit Suisse.
• Superior Energy (SPN) and Rowan Cos. (RDC) to overweight from equal weight at Barclays.
• Tesoro (TSO) to outperform from neutral at Macquarie.
• Mechel (MTL) to buy from neutral at Goldman.
• SunPower (SPWRA), LDK Solar (LDK) and First Solar (FSLR) to buy from hold at ThinkEquity.

MOST NOTEWORTHY: European banks, the Paper and Forest Products sector, Kindred Healthcare and Convergys were today's noteworthy upgrades:

• Keefe Bruyette upgraded the European Banks sector to Neutral from Underweight on valuation as they see limited downside from current levels. Included in the firm's top picks are HSBC Holdings Plc (NYSE: HBC) and Banco Santander SA (NYSE: STD).
• Credit Suisse upgraded the Paper and Forest Products sector to Overweight from Underweight citing valuations and expectations that fundamentals will bottom this fall. The firm raised shares of Temple-Inland Inc (NYSE: TIN) and Smurfit-Stone Container Corporation (NASDAQ: SSCC) to Outperform from Neutral.
• Friedman Billings upgraded shares of Kindred Healthcare Inc (NYSE: KND) to Outperform from Market Perform on valuation following the recent pullback and believes the company is well-positioned to beat modest expectations over the remainder of the year. The firm raised their target to $36 from $29.
• Oppenheimer raised Convergys Corporation (NYSE: CVG) to Outperform from Perform on valuation, as they believe investors should look at the company's business lines separately. Their sum of parts valuation yields an $18 target.

OTHER UPGRADES:

• Suncor Energy Inc (NYSE: SU) was upgraded to Overweight from Neutral at JP Morgan and to Outperform from Market Perform at Friedman Billings.
• UBS upgraded BT Group Plc (NYSE: BT) to Neutral from Sell.
• Broadcom Corporation (NASDAQ: BRCM) was upgraded to Buy from Neutral at Piper.

Temple-Inland (NYSE:TIN) announced a "transformation plan" today. This plan calls for a break-up into three separate, focused companies and the sale of the company's strategic timberland. Temple-Inland will retain the manufacturing operations of the business, such as packaging and building products. The company will spin off the financial services business and the real estate business into separate companies.

According to chairman and CEO Kenneth Jastrow, this transformation plan "will unlock shareholder value in a very tax efficient manner and provide our shareholders ownership in three outstanding businesses." Mr. Jastrow went on to highlight the success of Temple-Inland over the last several years. First, the fact that the company has, over the last five years, "generated total shareholder return of 107%, compared with 39% for the S&P 500 and a negative 5% for our peer group median." In addition, he highlighted the company's proven ability to return cash to shareholders ($710 million over the last two years due to dividends/buybacks).

After the plan is completed, the original company (Temple-Inland) will be a " low-cost, highly efficient manufacturing company focused on corrugated packaging and building products." This business has an excellent future, considering the corrugated packaging business has improved operating income by more than 1000% since 2003, according to the press release. In addition, the financial services business has a very bright future as it is "ideally positioned to continue to serve its targeted customers and has a solid foundation for growth and continued strong financial performance," according to the chairman and CEO. Lastly, the company's real estate business appears to have an interesting future with over 236,000 acres (85 projects). The real estate company's focus is value creation and, according to Jastrow, is in a very good position because they "have currently identified over 215,000 acres of high-value land located in growth corridors, thus providing the opportunity to create value through entitlement and real estate development."