MOST NOTEWORTHY: Smith & Nephew, British Sky Broadcasting and Electronic Data Systems were today's noteworthy downgrades:

• Smith & Nephew (NYSE: SNN) was cut to Underweight from Neutral at JP Morgan, citing deteriorating fundamentals in several of SNN's key business lines.
  
• Goldman removed British Sky Broadcasting (NYSE: BSY) from its Conviction Buy List and said shares continue to trade at all-time low multiples and that the timing with Sky-Virgin dispute remains unclear. Shares remain Buy rated.
  
• Friedman Billings downgraded Electronic Data Systems (NYSE: EDS) to Market Perform from Outperform based on valuation following the Hewlett-Packard (NYSE: HPQ) news.

OTHER DOWNGRADES:

• Goldman downgraded J Sainsbury (OTC: JSAIY) to Neutral from Buy and removed shares from the Conviction Buy List.
  
• Goldman also removed Hewlett-Packard from its Conviction Buy List.
  
• Citigroup cut BearingPoint (NYSE: BE) to Hold from Buy.
  
• Wachovia downgraded LHC Group (NASDAQ: LHCG) to Market Perform from Outperform.

MOST NOTEWORTHY: Brokers and asset managers, Credit Suisse, Barclays and HBOS PLC were today's noteworthy downgrades:

• Lehman downgraded the brokers and asset managers sector to Neutral from Positive and Merrill Lynch (NYSE: MER) and Bear Stearns (NYSE: BSC) to Equal Weight from Overweight. The firm cited weakness in the credit markets for the Bear Stearns downgrade and potential further write downs at Merrill Lynch for its downgrade.
  
• Bear Stearns downgraded shares of Credit Suisse (NYSE: CS) to Peer Perform from Outperform as they see risks to 2008 estimates from an expected decline in investment-banking revenue.
  
• Barclays (NYSE: BCS) was downgraded to Underweight from Neutral and HBOS PLC (OTC: HBOOY) was downgraded to Underweight from Overweight at HSBC to reflect the potential for higher write downs on debt securities and slower revenue growth.

OTHER DOWNGRADES:

• British Airways (OTC: BAIRY) was downgraded to Sell from Hold at ABN Amro.
  
• Merrill downgraded British Sky Broadcasting (NYSE: BSY) to Neutral from Buy.
  
• Merriman downgraded Zoran (NASDAQ: ZRAN) to Neutral from Buy.
  
• Deutsche Bank downgraded Home Depot (NYSE: HD) and Lowe's (NYSE: LOW) to Hold from Buy.

Carlyle Group is talking to British cable operator Virgin Media (NASDAQ: VMED) about taking over the company for about $20 billion. Blackstone (NYSE:BX) and KKR talked to the firm about a buy-out for $15 billion late last year, so the price is going up.

Virgin's market cap is only $8 billion, so any purchase would include the assumption of substantial debt.

The real question about Virgin is why anyone would want to own it. The company competes with a robust telecommunications industry which includes BT (NYSE: BT) and Vodafone (NYSE: VOD). Rupert Murdoch's British Sky Broadcasting (NYSE: BSY) delivers video services to large number of homes in the UK. Virgin hardly has an easy time competing. Murdoch's operation is taking subscribers from the cable company, and Virgin now routinely loses money.

Why would anyone want to pay a premium for it?

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

MOST NOTEWORTHY: UnitedHealth Group Inc (UNH), RF Micro Devices Inc (RFMD), UTi Worldwide Inc (UTIW) and Viacom B (VIA, VIA.B) were some of today's more notable downgrades:

• UBS cut UnitedHealth Group Inc (NYSE: UNH) to Neutral from Buy citing moderating fundamentals in commercial performance and large government exposure that will make it difficult for the company to outperform its peer group.

• Jefferies downgraded RF Micro Devices Inc (NASDAQ: RFMD) to Hold from Buy with a $7 target as the firm believes the company's June guidance signals a slow down of second-half fundamentals.

• Stephens cut UTi Worldwide Inc (NASDAQ: UTIW) to Equal Weight from Overweight based on ongoing cost issues.

• Viacom (NYSE: VIA, VIA.B) was downgraded to Sell from Hold at Sanders Morris to reflect weak ad growth at MTV, digital revenues that the firm believes are a displacement rather than accretive to the revenue base and the lawsuit against Google's (GOOG) YouTube, which the firm feels is the wrong call.

OTHER DOWNGRADES:

• Matrix USA cut Total Systems Services (NYSE: TSS) to Sell from Hold and NIC Inc (NASDAQ: EGOV) to Hold from Buy on valuation.

• Sealed Air Corp (NYSE: SEE) was taken down to Market Perform from Outperform at Wachovia citing valuation.

• HSBC downgraded shares of British Sky Broadcasting Group plc (NYSE: BSY) to Underweight from Neutral.

• Friedman Billings downgraded shares of Maguire Properties, Inc (NYSE: MPG) to Market Perform from Outperform citing the fallout from subprime-exposed office space.

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