MOST NOTEWORTHY: The process control sector, R.H. Donnelley, Vonage, Coca-Cola Enterprises and Transocean were today's noteworthy downgrades:

• Baird reduced estimates across the board in the process control sector due to lower expectations for North American industrial and residential construction. The firm downgraded Roper Industries (NYSE: ROP), Regal-Beloit Corp (NYSE: RBC) and Baldor Electric (NYSE: BEZ) to Neutral from Outperform and AO Smith Corporation (NYSE: AOS) to Underperform from Neutral.
• Goldman downgraded shares of R.H. Donnelley Corporation (NYSE: RHD) to Neutral from Buy after the company updated its 2007 guidance to reflect deteriorating trends in local advertising.
  
• Vonage Holdings Corp (NYSE: VG) was downgraded to Sell from Hold at Soleil due to liquidity concerns.
  
• Coca-Cola Enterprises (NYSE: CCE) was downgraded to Hold from Buy at Deutsche Bank on valuation and mixed near-term trends.
  
• Transocean Inc (NYSE: RIG) was downgraded to Hold from Buy at Gabelli. Even though the deepwater market continues to be strong, the firm is concerned regarding the continuing weakness in the jackup market as well as the limited upside potential due to the company's ships being in use through 2009.

OTHER DOWNGRADES:

• XM Satellite Radio Holdings (NASDAQ: XMSR) and Sirius Satellite Radio Inc (NASDAQ: SIRI) were downgraded to Neutral from Buy at UBS.
  
• Blue Nile Inc (NASDAQ: NILE) was downgraded to Neutral from Buy at Suntrust.
  
• Citigroup downgraded shares of CheckFree Corporation (NASDAQ: CKFR) to Hold from Buy.
  
• Morgan Stanley downgraded McAfee Inc (NYSE: MFE) to Underweight from Equal Weight.

MOST NOTEWORTHY: CheckFree (CKFR), Colgate-Palmolive (CL), Wal-Mart (WMT), Thornburg Mortgage (TMA) and Avery Dennison (AVY) were today's noteworthy downgrades:

• Suntrust downgraded CheckFree (NASDAQ: CKFR) to Neutral from Buy based on the Fiserv (FISV) acquisition.

• Colgate-Palmolive (NYSE: CL) was removed from Goldman's Conviction Buy List.

• Wal-Mart (NYSE: WMT) was cut to Neutral from Overweight at JP Morgan.

• Jefferies, RBC Capital, Piper Jaffray, Friedman Billings and Credit Suisse downgraded Thornburg Mortgage (NYSE: TMA) to Underperform based on liquidity concerns.

• Matrix cut Avery Dennison (NYSE: AVY) to Sell from Hold, and said Avery is being affected by the growing price competition in North America and Europe for self-adhesive labels and tabs...

OTHER DOWNGRADES:

• Merrill downgraded Westwood One (NYSE: WON) to Sell from Neutral.

• Morgan Keegan downgraded Haverty Furniture (NYSE: HVT) to Market Perform from Outperform.

• Hambrecht cut Akamai (NASDAQ: AKAM) to Hold from Buy.

• Raymond James downgraded Domtar (NYSE: UFS) to Outperform from Strong Buy.

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

MOST NOTEWORTHY: Websence (WBSN), RF Micro Devices (RFMD), Fiserv (FISV), Qwest (Q), and OSI Pharma (OSIP) were today's noteworthy upgrades:

• JP Morgan upgraded shares of Websence (NASDAQ: WBSN) to Overweight from Underweight ahead of the renewal period starting in the December quarter and expects this momentum to drive shares higher.

• RF Micro Devices (NASDAQ: RFMD) was raised to Buy from Hold at Citigroup, who said the Sirenza Microdevices (SMDI) deal gives the company its first real prospect for gross margin expansion in years.

• Matrix USA upgraded Fiserv (NASDAQ: FISV) to Buy from Sell, and expects the company to benefit from the Checkfree (CKFR) acquisition.

• Lehman upgraded shares of Qwest (NYSE: Q) to Overweight from Equal Weight, citing the hiring of industry veteran Ed Mueller as CEO. The firm believes the new CEO removes an overhang and could lead to a change in strategic direction and significantly increase capital spending.

• JP Morgan upgraded OSI Pharma (NASDAQ: OSIP) to Overweight from Underweight based on valuation and upcoming catalysts for Tarceva that should be seen in the next year...

OTHER UPGRADES:

• UBS upgraded Allstate (NYSE: ALL) to Neutral from Sell.

• ThinkEquity raised Hansen Medical (NASDAQ: HNSN) to Buy from Accumulate.

• Stanford upgraded Leap Wireless (NASDAQ: LEAP) to Buy from Hold.

• FTN Midwest upgraded shares of Lexmark (NYSE: LXK) to Neutral from Sell.

• Hambrecht upgraded NetGear (NASDAQ: NTGR) to Buy from Hold.

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

MOST NOTEWORTHY: Wyeth (WYE), Luminent Mortgage Capital (LUM), CheckFree (CKFR), EOG Resources (EOG) and K-Swiss (KSWS) were today's noteworthy downgrades:

• Cowen downgraded Wyeth (NYSE: WYE) to Neutral from Outperform based on limited long-term limited visibility.

• JP Morgan downgraded shares of Luminent Mortgage (NYSE: LUM) to Underweight from Neutral citing difficult CMO and CDO market conditions.

• JP Morgan downgraded CheckFree (NASDAQ: CKFR) to Neutral from Overweight following the company's acquisition by FiServ (FISV).

• Matrix cut shares of EOG Resources (NYSE: EOG) to Sell from Buy to reflect lower natural gas prices and increasing costs.

• Matrix believes soft demand for athletic shoes is leading to declining sales for K-Swiss (NASDAQ: KSWS), and cut shares to Sell from Buy...

OTHER DOWNGRADES:

• JMP Securities downgraded CapitalSource (NYSE: CSE) to Outperform from Strong Buy.

• Oppenheimer has turned negative on oil and gas names for the near-term, as they now believe the downside risk exceeds upside potential; they cut shares of Apache Corp (NYSE; APA), BP PLC (NYSE: BP), ConocoPhillips (NYSE: COP), Chevron (NYSE: CVX) and ExxonMobil (NYSE: XOM), among others, to Neutral from Buy.

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

MOST NOTEWORTHY: Expedia (EXPE), YRC Worldwide (YRCW), Fiserv (FISV), and select radio stocks were today's noteworthy upgrades:

• JP Morgan upgraded Expedia (NASDAQ: EXPE) to Overweight from Neutral on expectations for U.S. bookings growth and margin stabilization.

• YRC Worldwide (NASDAQ: YRCW) was raised to Neutral from Underperform based on valuation.

• Fiserv (NASDAQ: FISV) was upgraded to Sector Outperformer from Sector Performer at CIBC following the CheckFree (CKFR) acquisition.

• Banc of America upgraded Citadel Broadcasting (NYSE: CDL), Cox Radio (NYSE: CXR) and Entercom Comm (NYSE: ETM) to Neutral from Sell as they believe it is time to cover short positions with the expected Q3 weakness likely priced into shares. They caution that this upgrade is not a buy signal as downside risk remains...

OTHER UPGRADES:

• Wachovia upgraded Cabela's (NYSE: CAB) and KBR Inc (NYSE: KBR) to Outperform from Market Perform.

• Baird raised Lear (NYSE: LEA) To Outperform from Neutral.

• Nokia (NYSE: NOK) was upgraded to Outperform from Neutral at Credit Suisse.

• Pacific Crest upgraded shares of eBay (NASDAQ: EBAY) to Outperform from Sector Perform.

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

MOST NOTEWORTHY: Tektronix, Inc (TEK), GameStop Corp (GME) PrivateBancorp, Inc (PVTB), Quebecor World Inc (IQW) and CheckFree Corp (CKFR) were today's more noteworthy upgrades:

• JP Morgan upgraded shares of Tektronix (NYSE: TEK) to Overweight from Underweight citing improving sector fundamentals.

• JP Morgan also raised GameStop (NYSE: GME) to Overweight from Neutral based on the May sales data.

• Oppenheimer upgraded PrivateBancorp (NASDAQ: PVTB) to Neutral from Sell based on valuation.

• BMO Capital raised Quebecor World (NYSE: IQW) to Market Perform from Underperform on valuation.

• CheckFree (NASDAQ: CKFR) was assumed with a Sector Outperformer from Sector Performer at CIBC citing a favorable risk/reward, solid secular underlying trends, and overblown concerns for its rating...

OTHER UPGRADES:

• Symantec Corp (NASDAQ: SYMC) was upgraded to Buy from Neutral at Goldman.

• Ingersoll-Rand Co Ltd (NYSE: IR) was raised to Outperform from Peer Perform at Bear Stearns.

• ThinkEquity upgraded shares of Jones Soda Co (NASDAQ: JSDA) to Buy from Accumulate.

• BB&T upgraded Pacific Sunwear of California (NASDAQ: PSUN) to Buy from Hold.

• Goldman added Cigna Corp (NYSE: CI) to its America's Conviction List.

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

MOST NOTEWORTHY: CheckFree Corp (CKFR), Sprint Nextel Corp (S) and the semiconductor capital equipment sector were some of today's more noteworthy downgrades:

• Piper Jaffray downgraded Checkfree Corp (NASDAQ: CKFR) to Market Perform from Outperform after transferring coverage of the payment processor company.
• Sprint Nextel Corp (NYSE: S) was cut to Outperform from Strong Buy at Raymond James.
• Lehman cut the semiconductor capital equipment sector to Neutral from Positive, downgrading Cascade Microtech, Inc (NASDAQ: CSCD), Novellus Systems, Inc (NASDAQ: NVLS) and Teradyne, Inc (NYSE: TER) to Equal Weight from Overweight and cut Electroglas, Inc (NASDAQ: EGLS) to Underweight from Equal Weight.

OTHER DOWNGRADES:

• ThinkEquity cut Jones Soda Co (NASDAQ: JSDA) to Source of Funds from Buy based on valuation.
• Goldman is now cautious on the biofuel sector, downgrading the group to Cautious from Neutral.
• William Blair downgraded shares of Medimmune, Inc (NASDAQ: MEDI) to Market Perform from Outperform.
• Credit Suisse downgraded shares of Big 5 Sporting Goods Corp (NASDAQ: BGFV) to Underperform from Neutral citing valuation.
• Wachovia dropped Inkeepers USA Trust (NYSE: KPA) to Underperform from Outperform based on the acquisition from Apollo Investment Corp (AINV). Citigroup cut Inkeepers to Hold from Buy.

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

Checkfree Corporation (NASDAQ: CKFR), the check processing and bill presentment software leader, got pounded yesterday by investors on a JPM Securities analyst downgrade. The analyst cited a greater likelihood that Bank of America, CheckFree's largest customer, might move this software function in-house.

CheckFree's public response was not too comforting as it did not deny the possibility.

However, what could be more concerning is CheckFree's recent acquisition strategy. CheckFree has been moving away from its higher growth bill payment business and has focused more on its lower growth businesses. Typically, when a high growth company starts allocating capital away from what got it to the dance, it is not a good sign.

In the past, when CheckFree has gotten hit, we have blogged to jump into the stock. But with the possibility of losing BOFA as a customer, wait for this quarter's earnings call and what management has to say about this possibility. The December quarter's results were quite good. See if it was able to keep the momentum going.

After a couple of quarters of weakening growth, it appears the seeds are now in place for growth to return at CheckFree Corporation (NASDAQ: CKFR). The CSP business, CheckFree's bank channel business, jumped back to 7% sequential growth -- an important metric for this company.

The 7% CSP jump brings the business to a growth level that has attracted a lot of investor interest in the past and is a metric that led to strong stock performance. During the past six months that growth figure dropped to just 3%.

In addition to the jump in the CSP business, CheckFree is also beginning to sign up some huge customers. The company began discussing its new deal with American Express, which could be a big windfall for them. Also, CheckFree added Wal-Mart Stores (NYSE: WMT) for its walk-in pay product.

These new customers wins and the 7% sequential CSP growth mean investors will have to get back into CheckFree's stock. I say go along for the ride.

MOST NOTEWORTHY: CheckFree (CKFR) tops today's modest list of initiations.

• Checkfree Corporation (NASDAQ:CKFR) was initiated with a Market Perform and $36 target after the company delivered inline 1Q07 results. The firm doesn't expect the stock to be driven higher by multiple expansion or earnings.

OTHER INITIATIONS:

• Leap Wireless International, Inc. (NASDAQ:LEAP) was initiated with a Buy at Citigroup with a $73 target. The firm believes Leap is well positioned for growth due to its niche strategy of offering inexpensive unlimited voice in select local markets.
• Arena Pharma, Inc. (NASDAQ:ARNA) was initiated with an Overweight at Prudential and $22 target. The firm is positive on Lorcaserin's potential in the treatment of obesity and the potential for APD 125 in insomnia.

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