MOST NOTEWORTHY: REITs, Business Objects, Allstate Corp and P&C Insurance were today's noteworthy downgrades:

• Deutsche Bank downgraded REITs AvalonBay (NYSE: AVB), Boston Properties (NYSE: BXP), Health Care REIT (NYSE: HCN), Kimco (NYSE: KIM) and Public Storage (NYSE: PSA) to Hold from Buy on valuation following the recent share appreciation.
  
• Business Objects (NASDAQ: BOBJ) was downgraded to Neutral from Outperform at Baird following its acquisition by SAP AG (NYSE: SAP).
  
• Wachovia downgraded Allstate Corporation (NYSE: ALL) to Market Perform from Outperform and P&C Insurance (NYSE: PGR) citing deteriorating fundamentals in personal lines.

OTHER DOWNGRADES:

• UBS downgraded BEA Systems (NASDAQ: BEAS) to Neutral from Buy.
  
• JP Morgan downgraded Merrill Lynch (NYSE: MER) to Neutral from Outperform.
  
• Sealy Corporation (NYSE: ZZ) was downgraded to Neutral from Buy at Banc of America.
  
• Friedman Billings downgraded technology stocks, lowering ASE Test Limited (NASDAQ: ASTSF), ASML Holding (NASDAQ: ASML), KLA-Tencor (NASDAQ: KLAC) and Rudolph Technologies (NASDAQ: RTEC) to Market Perform from Outperform.

TheStreet.com's Jim Cramer shows you what one company's deal means to its competitor.

Buy BEA Systems (NASDAQ: BEAS) (Cramer's Take). That's my takeaway from SAP's (NYSE: SAP) (Cramer's Take) strange purchase of Business Objects (NASDAQ: BOBJ) (Cramer's Take). Why BEAS? Because the Business Objects acquisition by SAP shows a level of desperation that makes me feel that all that matters is that another wave of consolidation is about to take place.

Business Objects is effectively an American company, despite its location in France. Almost two-thirds of its revenue comes from here. SAP can pour on the strong euro and make things happen here that no domestic company can.

So why BEAS? Because BEAS is a direct competitor to Oracle (NASDAQ: ORCL) (Cramer's Take), which is the worldwide nemesis to SAP. If you go listen to the Oracle conference call where they make fun of BEAS, you have to be thinking that if SAP combined the strong -- and I think wildly overvalued - euro with BEA Systems, the Oracle competition won't look as steep as it does now.

BEAS, of course, says it is not for sale. It is still one more company that is stupidly ignoring the buildup of stock by Carl Icahn. My prediction: This ridiculous acquisition of the just-now blowing up Business Objects, a company that was getting its butt kicked, presages another buy from SAP of BEAS, regardless of the sinking in price of SAP's stock, something they knew would happen and did the deal anyway.

BEAS is cheap, with lots of cash and a burgeoning business in China. Business Objects was a much tougher sell.

BEAS is next, in my opinion, and the fact that it hasn't gone higher yet with Icahn's buying is the real opportunity.

RELATED LINKS:

• Jim Cramer's Best Blogs
• Value Stock-Picking, Week 1: How to Find Top Dividend Plays

Jim Cramer is a director and co-founder of TheStreet.com. He contributes daily market commentary for TheStreet.com's sites and serves as an adviser to the company's CEO. At the time of publication, Cramer had no positions in the stocks mentioned.

On last night's MAD MONEY on CNBC, Jim Cramer came out and said he thinks Carl Icahn's activist investor attempt to make BEA Systems, Inc. (NASDAQ: BEAS) get acquired may actually work. He said that Carl Icahn even went after stock options, which means he is avoiding some of his votes because he's that confident. Cramer thinks that if this does get acquired it will fetch $15.50 to $18.50 (or a 17% to 40% upside), and he thinks the downside is less. Ultimately, Cramer noted that Oracle Corp. (NASDAQ: ORCL) or IBM (NYSE: IBM) would be natural buyers.

For whatever this is worth, anyone buying BEA Systems on hopes of a buyout even with Carl Icahn's large stake needs to know that this company has been in the "Speculators Bin" for as long as I can remember it being around (literally). This is one that also is believed to have many "Anti-Takeover" provisions in place if management wants to fend off a buyout. That may or may not be the case, but the founder, chairman, CEO, and chief BEA-zer, Alfred Chuang, has said over and over how the company will remain independent. It doesn't mean he can't be dealt with at all, and doesn't mean he can't be won over, but he will have to want to go along with it or he'll be telling Icahn and Cramer to go look elsewhere. I have had this as a BAIT SHOP Value Stock before (now called the Special Situation Investing Newsletter for subscribers), although I have removed it twice and never added it back this year because it seemed too difficult to acquire.

Cramer also said today was a game changer, and he said you can buy almost anything. Here are some of his major lists that he has given with stocks he refers to often:

• Cramer was positive on Google Inc. (NASDAQ: GOOG) today.
• Here is his list of Top 9 Picks for 2007
• Here is his "New Four Horsemen of Tech"
• Here is his Mortgage Madness Portfolio, which way outperformed today.
• Here are his Top China Picks.

Jon C. Ogg produces the 24/7 Wall St., LLC Special Situation Investing Newsletter; he does not own securities in the companies he covers.

Carl Icahn put some real money on the table when he bought 8.5% of business software provider BEA Systems, Inc. (NASDAQ: BEAS). The company has a market cap of over $5.2 billion. It trades at just over $13 and moved up after hours on the news. Icahn had previously held a much smaller number of shares.

In an SEC filing quoted at MarketWatch "A sale of [BEA Systems] to a strategic acquirer will maximize the price of the shares," Icahn said, adding that he intends "to seek to meet with management of the Issuer to discuss the potential for such a transaction, as well as the Issuer's business and operations generally."

Although the company has posted good revenue growth around its core business of transaction tracking software, the company has not been able to report earnings because of an ongoing investigation into stock option grants. For the quarter ending July 31, BEA said revenue rose to $364.6 million from $339.6 million in the 2006 quarter.

The late SEC filings due to options problems has also put the company's Nasdaq listing at risk.

BEA has been the subject of takeover rumors. In July, a Credit Suisse analyst floated the idea that Oracle Corporation (NASDAQ: ORCL) might buy the company.

Douglas A. McIntyre is a partner at 24/7 Wall St.

BEA Systems (NASDAQ: BEAS) September call volume & volatility Up on Icahn position. BEAS, a leading supplier of service-oriented architecture (SOA) and middle-ware software, is recently up .50 to $13.27. BEAS has market cap of $5.1 billion. Dow Jones reported Carl Icahn owns 33.4 million shares of BEAS stock including 16.2 million options. BEAS September option implied volatility is at 58; October is at 40; above its 26-week average of 38 according to Track Data, suggesting larger risk.

Macy's (NYSE: M) is recently up .90 to $30.25 on renewed takeover chatter. M is expected to report EPS on November 14. M September 30 straddle is priced at $2. M October option implied volatility of 50 is above a level of 47 from 9/13/07 and above its 14-week average of 38 according to Track Data, suggesting larger risk.

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

MOST NOTEWORTHY: Nordstrom (JWN), Monster Worldwide (MNST), Lockheed Martin (LMT) and the U.S. Financials markets were today's noteworthy upgrades:

• Piper upgraded shares of Nordstrom (NYSE: JWN) to Outperform from Market Perform, citing valuation, and expects the company to have an upbeat tone on Thursday's quarterly report.

• Wachovia upgraded shares of Monster Worldwide (NASDAQ: MNST) to Outperform from Market Perform based on valuation and strength in its international business. The firm believes North American weakness is largely confined to the e-commerce channel while enterprise growth is ongoing and international business remains strong.

• Banc of America upgraded Lockheed Martin (NYSE: LMT) to Buy from Neutral on valuation.

• Deutsche Bank upgraded JP Morgan (NYSE: JPM) to Buy from Hold and U.S. Bancorp (NYSE: USB) & Comerica (NYSE: CMA) to Hold from Sell. The firm said JPMorgan's financial conglomerate structure gives it strength to gain share in times of stress. U.S. Bancorp was upgraded based on valuation and okay credit quality. Comerica was upgraded based on valuation and upcoming HQ move to Texas, which could make it a takeover target...

OTHER UPGRADES:

• JP Morgan upgraded Valueclick (NASDAQ: VCLK) to Overweight from Neutral.

• Bear Stearns upgraded BEA Systems (NASDAQ: BEAS) to Outperform from Peer Perform.

• Stifel raised Career Education (NASDAQ: CECO) to Buy from Hold.

• CL King upgraded Gap (NYSE: GPS) to Strong Buy from Neutral.

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

The most expensive home in the country, at $135 million, is on the market in Aspen, CO. according to the New York Times [registration required]. The seller? None other than Prince Bandar bin Sultan, the former ambassador to the United States from Saudi Arabia, a.k.a., Bandar Bush.

You'll recall the Prince walking hand-in-hand with George W. Bush during a 2005 meeting in Texas. Meanwhile, according to the Washington Post, GOP congressman Peter King recently introduced Bush to a soldier injured in one eye. Bush teared up and asked the young man to take off his dark glasses so he could see the wound, King recalled. "Human instinct is when someone has a serious injury to look the other way," King said. "He actually asked him to take them off. He actually touched the eye a little. It was almost as if he felt he had to confront it."

Bandar Bush's home is modest. At 56,000 square feet, Hala -- which means 'welcome' in Arabic -- is bigger than the White House, with a staff of 12. It has 15 bedrooms, 16 baths, a private barbershop and beauty salon just off the master suite and enough space for a party of 450 people. Hala's broker has received 1,000 requests to tour the home since last October when it went on sale but only 11 were deemed wealthy enough to tour the house.

Bandar Bush reportedly received $2 billion secretly from a major British arms contractor, BAE Systems plc (LSE: BA). It's a nice little club and must be a great house -- you can see it if you're one of 947 billionaires and your eyes haven't been blown out by a roadside bomb in Iraq.

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 has no financial interest in BAE Systems.

Yahoo! (NASDAQ: YHOO) implied volatility flat into EPS and unconfirmed chatter. YHOO is recently trading up $0.55 to $27.85. YHOO is expected to report EPS on 7/17. YHOO is frequently mentioned as a merger candidate with Microsoft (NASDAQ: MSFT) and upper level management changes. Unconfirmed chatter is circulating this morning that CEO Terry Semel may resign. YHOO option implied volatility of 34 is near its 26-week average according to Track Data, suggesting flat risk.

BEA Systems (NASDAQ: BEAS) volatility and July call volume elevated on renewed chatter. BEAS, a leading supplier of middleware software, is recently up 15 cents to $13.28. Unconfirmed chatter is circulating that Hewlett-Packard (NYSE: HPQ) having an interest in BEAS for $18.50 a share. ORCL and IBM have been frequently mentioned as interested in BEAS. BEAS will be at NXTcomm this week, a global forum of information, communications, entertainment and technology companies. BEAS July option implied volatility of 43 is above its 26-week average of 36 according to Track Data, suggesting larger risk.

Option volume leaders today are: Yahoo (NASDAQ: YHOO), Symantec (NASDAQ: SYMC) and Apple (NASDAQ: AAPL).

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

Another week, another run through the rumor mill. And, as usual, it all surrounds possible takeovers/buyouts.

WENDY'S INTERNATIONAL INC (NYSE: WEN)

Up first is Wendy's, because since the company is exploring strategic alternatives, and shareholder Highfields Capital Management is pushing for a sale, the idea of a suitor isn't that farfetched. The rumor is that this mystery suitor has bid for the company. Will this Biggie-size Wendy's stock price? Only time will tell.

ARCHER DANIELS MIDLAND COMPANY (NYSE: ADM)

And in the earlier stages of the M&A cycle, the rumor with Archer Daniels Midland is that the company has hired a strategic adviser. This wouldn't be that mind-blowing, considering it follows an EPS miss when the company reported on May 1, and a downgrade by ThinkEquity on May 2 on margin weakness.

BEA SYSTEMS INC (NASDAQ: BEAS)

File this under "the boy that cried wolf." BEA Systems has long been the subject of takeover talk, and it has continued this week. This despite firms such as Bernstein saying a takeover is unlikely as the company's valuation is too high.

BEA Systems (NASDAQ:BEAS) has had a very rough month. The company makes software that allows different hardware and software products to communicate with one another. Wall Street would think that these products would be useful.

However, growth at the tech company has been tepid, and its guidance seems to offer more of the same. For the quarter ending January 30, 2007, revenue rose 15% from the same quarter a year ago to $391 million. For the current quarter, however, revenue will actually be down from the previous quarter and well below analyst estimates.

BEA Systems is yet another tech company caught up in the options scandal, so it will be a long time before investors will know what the firm's actual earnings are.

The company therefor has two strikes against it: no revenue growth and an SEC issue.

To avoid strike three, the company needed a bit of good luck. That came the form of a Nasdaq extension for filing its last two quarters of earnings. The extension is good until March 12 but the alternative would be a delisting and a trip to the Bulletin Board. Many institutional investors cannot own shares in companies that are not traded on major exchanges, which might have caused an exodus from the stock.

BEAS now has bit of time to show that it has a business that merits some attention and buying from investors. The stock has dropped from $16.77 last October to the current $11.80. Missing the Nasdaq deadline could cut that price down much further.

Douglas A. McIntyre is a partner at 24/7 Wall St., LLC.

MOST NOTEWORTHY: RealNetworks, Inc (RNWK), The Boeing Co (BA), L-3 Communications Holdings (LLL) and Research in Motion (RIMM) were some of today's most notable upgrades:

• Jefferies upgraded RealNetworks, Inc (NASDAQ: RNWK) to Hold from Underperform with an $8 target on valuation.

• JP Morgan raised The Boeing Co (NYSE: BA) and L-3 Communication Holding's (NYSE: LLL) rating to Neutral from Underweight citing valuation.

• Yesterday's "China Effect" on the U.S. markets have created a buying opportunity in Research in Motion Ltd; ThinkEquity upgraded shares of Research in Motion Ltd (NASDAQ: RIMM) to Buy from Accumulate with a $165 target.

OTHER UPGRADES:

• Ciena Corp (NASDAQ: CIEN) was upgraded to Overweight from Neutral at JP Morgan.

• Wachovia upgraded Fresh Del Monte Produce inc (NYSE: FDP) to Market Perform from Underperform based on an improving banana outlook and cost environment.

• Citigroup upgraded Nestle (OTC: NSRGY) to Buy from Hold to reflect the company's improved cash flows.

• Bear Stearns upgraded BEA Systems Inc (NASDAQ: BEAS) to Peer Perform from Underperform.

• Stephens upgraded Sanderson Farms Inc (NASDAQ: SAFM) to Overweight from Equal Weight with a $35 target.

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

Monday February 19

• U.S. markets closed for President's Day holiday

Tuesday February 20

• Wal-Mart Stores (NYSE: WMT) to report Q4 earnings; conference call at 7:30am. Analysts will review Wal-Mart's same store sales, overall traffic, new products displayed, overall product mix, employee retention rates, sector position, and margins, along with Wal-Mart's overall global new store opening timetable, including store square footage expansion targets.
• Hewlett Packard Company (NYSE: HPQ) to report Q4 earnings; conference call at 5pm. Analysts will be focusing on HP's overall revenue, the performance of their various divisions, and any comnent's HP makes about the effect of the launch of Microsoft Corporation's (NASDAQ: MSFT) Vista on sales.
• Caremark Rx (NYSE: CMX) had scheduled a special shareholder meeting regarding the CVS Corporation (NYSE: CVS) merger today. It was postponed until at least March 9 by the Delaware Chancery Court to allow more time for dissemination of information.

Wednesday February 21

• Nokia Corporation (NYSE: NOK), Sprint Nextel Corporation (NYSE: S) and Qualcomm Inc (NASDAQ: QCOM) to hold press conference, according to PhoneNews.com, which speculated that the conference could be the end of patent disputes between Nokia and Qualcomm, meaning Nokia may announce a return to CDMA handset distribution, with EV-DO chipsets.

Thursday February 22

• BEA Systems Inc (NASDAQ: BEAS) to report Q4 earnings; conference call at 5pm. Note that BEA Systems just concluded a stock options review that did not result in a breakup in management, which Pacific Crest Securities believes removes an overhang on the company.

Friday February 23

• CVS Corp had scheduled a shareholder meeting today, but it has been postponed in light of the Delaware Chancery Court's decision to enjoin the February 20, 2007 shareholder meeting of Caremark Rx.

Oracle Corp. (NASDAQ: ORCL) reported a sharp deceleration in applications growth in its Q2 earnings release last night. Apps growth was 28% versus some 80% in the previous quarter.

However, the core of Oracle's strategy remains in place: using middleware as a platform to strengthen its position against SAP (NYSE:SAP) and BEA Systems (NASDAQ:BEAS) and, in addition, using acquisitions to enter new vertical markets.

Oracle said that it continues to gain market share against BEA and is having very good success entering the retail vertical with revenue tripling in this space.

Oracle provided a relatively sluggish outlook for the February quarter which might lead to this stock being dead money for a while, but investors should stay with this stock. The global economy is growing nicely and demand for Oracle's products should remain solid. In addition, there is still little euphoria for tech stocks which often signifies a top in the tech sector.

MOST NOTEWORTHY: BEA Systems (BEAS) and Lowe's (LOW) were today's notable upgrades:

• Piper Jaffray upgraded BEA Systems Inc. (NASDAQ:BEAS) to Outperform from Market Perform, citing secular growth trends in Service Orientated Architecture and VoIP; the analyst also said that given its strong products and costumer base, BEA Systems could be an acquisition target.
• Bear Stearns upgraded Lowe's Companies Inc. (NYSE:LOW) to Outperform from Peer Perform, as the firm believes the end of Lowe's downward EPS revisions are nearing an end; additionally, based on expectations for a stabilization in housing, Bear Stearns thinks that an upward EPS revision cycle will start in the second-half of 2006.

OTHER UPGRADES:

• Ciena Corp. (NASDAQ:CIEN) was upgraded to Buy from Hold with a $36 target at Deutsche Bank, citing better-than-expected fourth-quarter guidance, deal exposure and a solid pipeline.
• The Cooper Companies Inc. (NYSE:COO) was upgraded to Buy from Hold at Matrix USA, citing valuation for the move.

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

BEA Systems Inc. (NASDAQ:BEAS) raised to Outperform at Piper Jaffray.

Monsanto Co. (NYSE:MON) raised to Buy at Goldman Sachs.

Oracle Corp. (NASDAQ:ORCL) downgraded to Neutral at First Albany on valuation and spending issues in the next few quarters.

Paper Upgrade: Temple-Inland Inc. (NYSE:TIN) and Weyeheuser Co. (NYSE:WY) were both raised to Buy at Deutsche Bank.

PRA International (NASDAQ:PRAI) was cut to Neutral at Goldman Sachs and at Baird after the company warned and announced top officer resignations.

Full list of analyst calls here.

Jon Ogg is a partner in 24/7 Wall St., LLC; he down not own securities in the companies he covers.