Analyst upgrades:

• UBS upgraded Apple (NASDAQ: AAPL) to Buy from Neutral and raised its target to $265 from $170, citing higher iPhone expectations, new partnerships, and likely upward revisions to Street estimates driven by gross margins.
• Wells Fargo upgraded Comcast (NASDAQ: CMCSA) to Outperform from Market Perform. The firm views a possible deal between end General Electric's (NYSE: GE) NBC Universal positively, as it thinks NBC will provide higher-margin growth for Comcast.
• Janney Montgomery upgraded Michael Baker (AMEX: BKR) to Buy from Neutral after the company completed the sale of its Energy business. The firm raised its target on shares to $46 from $40.
• Jefferies assumed coverage of Endo Pharma (NASDAQ: ENDP) and upgraded the stock to Buy from Hold. The firm cites valuation, a strong base business, and solid cash flow for the upgrade, and has a $30 target price on shares.
• Marten Transport (NASDAQ: MRTN) was upgraded to Overweight from Equal Weight at Stephens.
• U.S. Bancorp (NYSE: USB) was upgraded to Outperform from Market Perform at Keefe Bruyette.

XTO Energy (NYSE: XTO), a major oil and natural gas producer, has agreed to shell out $4.2 billion for privately held Hunt Petroleum. The deal is expected to add about 1.052 trillion cubic feet of natural gas reserves, located primarily in Texas, Louisiana and the Gulf Coast, to XTO's supplies.

XTO has been quite acquisitive lately. Only in late May, XTO agreed to pay $1.85 billion for Headington Oil Co., which may have 4.3 billion barrels of recoverable oil.

Yes, such deals are a wonderful way to bulk up for growth. Actually, XTO is projecting production growth of 28% to 30% for this year.

As for Hunt Petroleum, it's a legend in the oil business -- going back 80 years. But late last year, the board retained Goldman Sachs (NYSE: GS) to seek out a buyer (I'm sure the Hunt family was looking for some liquidity, especially in light of the surging energy market).

And so far, Wall Street likes the deal. In today's trading, XTO's shares are up 3% to $69.93.

Tom Taulli is the author of various books, including The Complete M&A Handbook and The Edgar Online Guide to Decoding Financial Statements. He also operates MergerBook.com.

"After coal, natural gas is the No. 2 source for power generation; and the largest source of gas production in the US is now unconventional reserves," explains Neil George.

In his Personal Finance newsletter, the advisor looks at two favorites plays on this trend: Chesapeake Energy (NYSE: CHK) and XTO Energy (NYSE: XTO). Here is his review.

"Unconventional reserves now account for close to 40% of all domestic gas production. In addition, with the possible exception of deepwater fields, unconventional production is the only domestic source of gas that's likely to show real growth in coming years.

"The term 'unconventional' refers to any gas field that can't be produced economically using traditional well technologies. But, using a combination of new techniques, wells drilled in unconventional fields are prolific producers. US natural gas producers remain on a 17%-plus tear in gains so far this year.

In this investing environment, it's best to consider a defensive play or two, and while the oil/gas sector is not a defensive, strictly speaking, XTO Energy comes close to fitting the bill, and is worth an evaluation.

XTO Energy (NYSE: XTO) buys primarily demonstrated oil/gas properties -- areas where the commodities are 'known,' if you will - - then produces and markets natural gas, natural gas liquids, and crude oil, primarily.

XTO owns interests in more than 18,800 wells and operates gas gathering systems in Arkansas, Oklahoma, and Texas.

The market in late 2007 and early 2008 -- how shall one put it? Well, diplomatically, there are a few uncertainties to keep investors awake at night: subprime mortgage defaults, the extent of the credit crunch, the price of oil, inflation, geopolitical concerns, to name just a few.

In this climate it's best to consider a defensive play or two, and while the oil and gas sector is not defensive, strictly speaking, XTO Energy comes close to fitting the bill. That's because XTO Energy (NYSE: XTO) buys primarily demonstrated oil and gas properties. XTO owns interests in more than 18,800 wells and operates gas gathering systems in Arkansas, Kansas, Oklahoma, and Texas.

Analysts expect oil and gas production growth of 17%-20% in 2007, and 14%-17% in 2008. Analysts also like XTO's 6.9 trillion cubic feet of proved natural gas reserves. Look for natural gas to play a larger role in the United States' energy use, amid sustained high oil prices and increasing environmental awareness. The Reuters F2007/F2008 EPS consensus estimates for XTO are $4.40/$4.33.

This morning I posted on five stocks that might be worth buying in New York society doyenne, Brooke Astor's $23.5 million portfolio of 15 stocks. But with Spring finally sprung, which ones should she clean out of her portfolio?

This is the question a CNBC producer posed to me after reading the Astor post. I'll be appearing tonight at 7:15pm with Melissa Francis's On The Money. Here are the three stocks I would clean out of Brooke Astor's portfolio:

• Encana Corp. (NYSE: ECA), the Canadian gas producer, is overpriced given shrinking earnings expectations. ECA had $16.4 billion in sales -- up 16% -- and $5.1 billion in profit -- down 66% -- in the last year. Its earnings are expected to decline 7.8% to $4.01 next year and its P/E of 8.6 seems high given the earnings decline. Encana has a dividend yield of 1.6% and it rose 4.3% in the last year.
• XTO Energy (NYSE: XTO), the Texas oil and gas producer, is also overpriced given shrinking earnings expectations. XTO had $4.6 billion in sales -- up 30% -- and $1.9 billion in profit -- down 5% -- in the last year. Its earnings are expected to decline 0.4% to $4.55 next year and its P/E of 10.9 seems high given the earnings decline. XTO's dividend yield is 0.89%.and it rose 4.3% in the last year.
• Morgan Stanley (NYSE: MS), the investment bank, is pricey given its low earnings growth expectations. MS had an explosive 2006 -- with $83.2 billion in sales -- up 47% -- and $8.4 billion in profit -- up 59%. Its earnings are expected to rise a mere 3.8% to $8.18 next year and its P/E of 10.1 yields a lofty PEG ratio of 2.65. MS has a dividend yield of 1.33% and it rose 29% in the last year.

Of the three, MS is Astor's biggest holding and if its earnings exceed these low expectations the stock could do quite well. But given all the uncertainty in the mortgage markets -- to which MS is exposed -- I'd suggest Astor lighten up on MS as well.

Peter Cohan is President of Peter S. Cohan & Associates, a management consulting and venture capital firm. He also teaches management at Babson College and edits The Cohan Letter. He has no financial interest in the securities mentioned in this post.