Analyst Upgrades

• Expedia (EXPE) to buy from hold at Citigroup.
• Weatherford (WFT) to outperform from market perform at Wells Fargo.
• Abercrombie & Fitch (ANF) to buy from neutral at BofA/Merrill.
• MDC Holdings (MDC) to outperform from neutral at Credit Suisse.
• AutoNavi (AMAP) to buy from neutral at Goldman.
• Ciena (CIEN) and Nvidia (NVDA) to neutral from underweight at JPMorgan.
• Canadian Pacific (CP) to outperform from market perform at Raymond James.
• First Midwest (FMBI) and Quiksilver (ZQK) to buy from hold at Jefferies.
• Sonic (SONC) to neutral from negative at Susquehanna.
• MIPS Technologies (MIPS) to buy from hold at Benchmark Co.
• Arrow Electronics (ARW) and Avnet (AVT) to buy from hold at Stifel Nicolaus.

Analyst Upgrades

• FBR Capital upgraded Halliburton (HAL) to outperform from market perform as it sees less headline risk from the Gulf of Mexico spill following Wednesday's House Energy and Commerce Committee hearing. The firm upped its target for shares to $44 from $35.
• FBR Capital also upgraded Morgan Stanley (MS) to outperform from market perform as it views the valuation as attractive following the recent pullback in shares. The firm maintains a $35 price target for shares.
• Deutsche Bank upgraded Avnet (AVT) to buy from hold on valuation; it views the recent pullback as a buying opportunity. The firm raised its target for shares to $39 from $36.
• U.S. Steel (X) was upgraded to conviction buy from buy at Goldman.
• News Corp. (NWS) was upgraded to buy from hold at Argus.
• Sprint (S) was upgraded to outperform from market perform at Raymond James.

Avnet Inc. (NYSE: AVT) is one of the largest distributors of semiconductors and computer-related products in the world.

After falling from more than $40 in 2007, its common stock bottomed in October 2008, well before the bear market low in March. Since then, it has been trading in a bull channel with a top around $29 and low at $23.

The long-term trend of this favored blue chip is up, but recent profit-taking has driven it below $25 and could even result in a test of the support line at $23. S&P rates this stock as a strong buy (five stars) with a price objective of $33. From a technical standpoint, the chart's objective is also $33.

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Analyst upgrades:

• Wachovia upgraded shares of Exelon (NYSE: EXC) to Outperform from Market Perform to reflect the company's attractive nuclear fleets and strong operational track record.
  
• Jesup & Lamont upgraded Ormat Technologies Inc. (NYSE: ORA) to Buy from Hold on valuation and increasing visibility on near-term Products revenue.
  
• RBC Capital upgraded Memc Electronic (NYSE: WFR) to Outperform from Sector Perform on expectations of improved demand growth following the likely eight-year extension of the US solar tax credit program.
• AmBev (NYSE: ABV) was raised to Outperform from Neutral at Credit Suisse.
  
• AmerisourceBergen (NYSE: ABC) was upgraded at Merrill Lynch to Buy from Neutral.
  
• Piper upgraded Anadys Pharma (NASDAQ: ANDS) to Neutral from Sell.

Analyst downgrades:

Avnet (NYSE: AVT) distributes electronic components, computer products, software and embedded subsystems to more than 100,000 manufacturers and resellers in the Americas, the Middle East, Asia, Africa and Europe. The Electronics Marketing division provides such products as semiconductors, electronic connectors, electronic wires and cables, electromechanical products and interconnect assemblies. The Technology Solutions division sells mid- to high-end servers, enterprise computing systems, data storage products and software. The firm also provides financial and technical services. Suppliers include Cisco Systems (NASDAQ: CSCO), Hewlett-Packard (NYSE: HPQ) and Oracle (NASDAQ: ORCL).

The firm pleased investors last week, when it announced fiscal Q2 EPS of 89 cents and revenues of $4.75 billion. Analysts had been expecting 85 cents and $4.56 billion. Management also guided Q3 EPS to 85-89 cents (85 cent consensus) and Q3 revenues to $4.37-$4.57 billion ($4.35B consensus).

Manufacturers and resellers generally prefer to do business with large, well-established distributors. On the electronics side, one of the biggest such outfits is headquartered in Phoenix. It serves customers in 70 countries.

Avnet (NYSE: AVT) distributes electronic components, computer products, software and embedded subsystems to more than 100,000 manufacturers and resellers in the Americas, the Middle East, Asia, Africa and Europe. The Electronics Marketing division provides such products as semiconductors, electronic connectors, electronic wires and cables, electromechanical products and interconnect assemblies. The Technology Solutions division sells mid- to high-end servers, enterprise computing systems, data storage products and software. The firm also provides financial and technical services. Suppliers include Advanced Micro Devices (AMD), Cisco Systems (CSCO), Hewlett-Packard (HPQ), IBM (IBM), Microsoft (MSFT), Motorola (MOT) and Oracle (ORCL).

The firm pleased investors earlier in the month, when it announced fiscal Q4 EPS of 81 cents and revenues of $4.24 billion. Analysts had been expecting 76 cents and $4.2 billion. Management also guided Q1 EPS to 69-73 cents (73 cent consensus), Q1 revenues to $4.0-$4.2 billion ($4.12B consensus) and FY08 EPS to $3.17-$3.31 ($3.15 consensus). Citigroup subsequently upgraded the issue from "hold" to "buy." The earnings news ultimately popped the stock into a bullish "pennant" consolidation pattern. Prices frequently exit pennants moving in the same direction they were traveling when they entered them. In this case, that would be to the upside.

Altogether, brokers now recommend the shares with two "strong buys," four "buys" and four "holds." Analysts see a 17% average annual growth rate through the next five years. The AVT P/E ratio (14.92), Price to Sales ratio (0.37), Price to Book ratio (1.72), Price to Cash Flow ratio (13.04), Price to Free Cash Flow ratio (8.77), Sales Growth rate (17.32%) and EPS Growth rate (35%) compare favorably with industry, sector and S&P 500 averages. Institutional investors hold about 95% of the outstanding shares. The stock is one of those used to calculate the S&P 400 MidCap Index. Over the past 52 weeks, it has traded between $18.28 and $44.68. A stop-loss of $33.70 looks good here.

Larry Schutts is a contributing editor for Theflyonthewall.com and the Vice-President of Stockwinners.com.

MOST NOTEWORTHY: Hess Corp (HES), American Home Mortgage Investment Corp (AHM) and Anglo American plc (AAUK) were today's noteworthy downgrades.

• Lehman Brothers downgraded Hess Corp (NYSE: HES) to Underweight from Equal-Weight based on valuation.
• American Home Mortgage Investment Corp (NYSE: AHM) was cut to Underperform from Market Perform at Keefe Bruyette, to Market Perform from Outperform at Friedman Billings, to Equal-Weight from Overweight at Lehman Brothers, to Sell from Hold at Citigroup and to Hold from Buy at Deutsche Bank.
• Anglo American plc (NASDAQ: AAUK) was downgraded to Underperform from Market Perform at BMO Capital Markets based on valuation.

OTHER DOWNGRADES:

• Murphy Oil Corp (NYSE: MUR) was cut to Equal-Weight from Overweight at Lehman.
• Credit Suisse downgraded Alaska Air Group, Inc (NYSE: ALK) to Neutral from Outperform.
• Gabelli downgraded shares of A. Schulman, Inc (NASDAQ: SHLM) to Hold from Buy to reflect the company's weak second-quarter.
• Raymond James downgraded Avnet, Inc (NYSE: AVT) to Market Perform from Outperform.
• Blyth, Inc (NYSE: BTH) was cut to Sell from Hold on valuation.

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

On today's STOP TRADING! segment on CNBC, Cramer again talked piggybacking on window dressing at the end of the quarter (this Friday).

Tesoro Corp. (NYSE: TSO) and Avnet Inc. (NYSE: AVT) were noted. Vulcan Materials Co. (NYSE: VMC) and Florida Rock Industries, Inc. (NYSE: FRK) were noted. RadioShack Corp. (NYSE: RSH) is one that was noted as potentially still going up because of Julian Day's turnaround. Cramer said he'd buy it hand over fist if it came down very much. On Target Corp. (NYSE: TGT), Cramer thinks that you can go back in under $59. Monsanto Co. (NYSE: MON), Deere & Co. (NYSE: DE) and Bunge Ltd. (NYSE: BG) were noted in the farmer section.