Analyst upgrades:

• Credit Suisse upgraded Hewlett-Packard (NYSE: HPQ) to Outperform from Neutral and raised its target to $55 from $44 based on earnings momentum and a bottom in the Imaging and Printing segment. Note that Dell was downgraded to Neutral from Outperform.
• Jefferies upgraded Covance (NYSE: CVD) to Buy from Hold as it believes investor expectations are more reasonable following the company's conference presentation and that its Late Stage segment should continue to post strong results. The firm raised its target on shares to $65 from $5.
• Stephens upgraded Home Bancshares (NASDAQ: HOMB) to Overweight from Equal Weight to reflect improved capital levels and a better-than-expected near-term outlook. The firm raised its target on shares to $27 from $24.
• Citigroup upgraded Macy's (NYSE: M) to Buy from Hold after meeting with management as it believes the My Macy's localization is gaining traction. The firm raised its target on shares to $30 from $15.
• Gymboree (NASDAQ: GYMB) was upgraded to Outperform from Market Perform at FBR Capital.
• DISH Network (NASDAQ: DISH) was upgraded to Outperform from Market Perform at Wells Fargo.
• Baytex Energy (NYSE: BTE) was upgraded to Sector Outperformer from Sector Performer at CIBC.

Analyst upgrades:

• UBS upgraded Target (NYSE: TGT) to Buy from Neutral and raised its price target to $52 from $45 citing reduced inventories, some credit stability, and an improved back-to-school period.
• Credit Suisse said concerns regarding Safeway's (NYSE: SWY) price position are overblown and that earnings risk is limited. The firm upgraded shares to Outperform from Neutral and raised the target price to $25 from $22.
• Oppenheimer upgraded Canadian Solar (NASDAQ: CSIQ) to Outperform from Perform as it believes the story is underappreciated following the recent sector rally. The firm has a $14 price target on the stock.
• CME Group (NASDAQ: CME) was upgraded to buy from Neutral at Goldman.
• Freeport McMoRan (NYSE: FCX) was upgraded to Overweight from Neutral at JP Morgan.
• Gilead Sciences (NASDAQ: GILD) was upgraded to Buy from Neutral at FTN Equity.

Analyst upgrades:

• Jefferies upgraded shares of Alkermes (NASDAQ: ALKS) to Overweight from Neutral on valuation, as they believe the current share price undervalues Risperdal Consta and provides little to no value for other pipeline drugs.
  
• JP Morgan upgraded ASML Holding (NASDAQ: ASML) to Buy from Hold following the company's Q1 results, as they believe further estimate reductions are unlikely.
  
• UBS expects ITT Educational (NYSE: ESI) to benefit from strong enrollment growth and they see less private student lending risk. Shares were upgraded to Buy from Neutral.
• BMC Software (NYSE: BMC) was upgraded to Buy from Neutral at Goldman and added to the firm's Conviction Buy List.
  
• Credit Suisse (NYSE: CS) was upgraded to Buy from Neutral at Merrill Lynch.
  
• Covance (NYSE: CVD) was raised to Overweight from Equal Weight at First Analysis.

Analyst downgrades:

• UBS downgraded Anglo American (NASDAQ: AAUK) to Neutral from Buy and added shares to its Short-term Sell list citing the significant reduction in 2009 coal prices and estimates.
  
• Friedman Billings cut Century Aluminum (NASDAQ: CENX) to Market Perform from Outperform and lowered its target to $8 from $18 shares to reflect a lowered aluminum price forecast and financing concerns.
  
• Bernstein downgraded eBay (NASDAQ: EBAY) and Amazon (NASDAQ: AMZN) to Market Perform from Outperform citing recent share performances and the difficult macro environment.
• CommVault (NASDAQ: CVLT) was downgraded to Sell from Neutral at Goldman and added to the Conviction Buy List.
  
• TomoTherapy (NASDAQ: TOMO) was cut to Market Perform from Outperform at William Blair.
  
• Boston Properties (NYSE: BXP) was lowered to Neutral from Buy at UBS.

Analyst initiations:

• Morgan Keegan initiated Brinker (NYSE: EAT) with a Market Perform citing the difficult macro economy, relative debt levels and the competitive environment.
  
• Brookdale Senior Living (NYSE: BKD) was initiated at Oppenheimer with an Outperform rating and $12 target. The firm expects the company to benefit from growing demand for higher acuity assisted living.
  
• Baird initiated Healthcare Realty (NYSE: HR) with an Underperform rating and $19 target citing the company's premium valuation vs. the group.
• UBS initiated Expedia (NASDAQ: EXPE), Priceline (NASDAQ: PCLN), and Orbitz Worldwide (NYSE: OWW) with Neutral ratings citing the difficult near-term demand environment.
  
• FedEx (NYSE: FDX) was started at Jesup & Lamont with a Hold rating.

Analyst upgrades:

• Whole Foods (NASDAQ: WFMI) was upgraded to Neutral from Sell at UBS.
  
• Archer Daniels Midland (NYSE: ADM) was upgraded to Equal Weight from Underweight at Barclays.
• AutoZone (NYSE: AZO) was raised to Buy from Neutral at Merrill Lynch.
• B. Riley upgraded S&T Bancorp (NASDAQ: STBA) to Buy from Neutral and lowered its target to $35 from $38 on valuation, as they believe the sell-off post-Q3 results is overdone.
  
• Jefferies upgraded GSI Commerce (NASDAQ: GSIC) to Buy from Hold on valuation after Q4 revenue guidance was reset lower. The firm lowered their target to $13 from $18.
  
• JP Morgan upgraded shares of DHT Maritime (NYSE: DHT) and General Maritime (NYSE: GMR) to Overweight from Neutral on the company's valuation and dividend stability.

Analyst downgrades:

• HSBC cut Prudential (NYSE: PUK) to Neutral from Overweight as they believe capital has eroded and debt refinancing is increasingly difficult.
  
• Freeport McMoRan (NYSE: FCX) was downgraded to Neutral from Buy at Goldman.
  
• Logitech (NASDAQ: LOGI) was lowered to Hold from Buy at Citigroup and to Neutral from Outperform at Credit Suisse.

Given the market's continued choppy/consolidated pattern (or perhaps worse), one would think that there isn't a promising business model in the states today, with a technically-strong stock chart accompanying it. Pre-clinical / clinical research company Covance dispels that thesis.

Covance (NYSE: CVD) develops and conducts pre-clinical and clinical trials of potential commercial drugs. The company also offers laboratory testing services to companies in the chemical, agri-chemical, and food sectors.

Analysts like CVD's ramping drug development services demand from both pharmaceutical and biotech companies, new orders, market-share increase prospects, and the company's sector-leading research lab. The Reuters F2007/F2008 EPS consensus estimates for CVD are $2.65/$3.12.

The risks? Project cancellations, or a reduction in research and development spending by pharmaceutical and/or biotech companies would hurt CVD's results. Analysts also have their eye on a possible slowdown in drug development outsourcing.

The First Call mean rating for CVD is: Buy. [14 firms.] Mean 2008 target: $94.00. [high: $106, low: $83.]

Stock Analysis: Covance is a moderate-risk stock not suitable for low-risk investors. Investors with an investment horizon longer than two years should be rewarded from CVD's shares. Sell / Stop Loss if you were to purchase shares in this company: $56.

DISCLOSURE: Joseph Lazzaro has no positions in stocks. In addition to private real estate holdings, he owns corporate and municipal bonds, and cash certificates of deposit.

MOST NOTEWORTHY: Catalyst Pharm, Ruth's Chris Steak House and Dynegy were today's noteworthy initiations:

• Rodman & Renshaw is optimistic on Catalyst Pharmaceutical Partners' (NASDAQ: CPRX) Vigabatrin in drug addiction, initiating shares with a Market Outperform rating and $9 target.
• SunTrust started Ruth's Chris Steak House (NASDAQ: RUTH) with a Neutral rating and $13 target, citing the difficult spending environment and cautious sentiment.
• Jefferies initiated shares of Dynegy Inc. (NYSE: DYN) with a Buy rating and $9 target and expects improved cash flow and earnings from the projected improvement in market heat rates in the Midwest and PJM.

OTHER INITIATIONS:

• Bear Stearns resumed coverage of Siemens AG (NYSE: SI) with an Outperform rating.
• Wachovia initiated the pharmaceutical services sector with an Overweight rating and started Covance Inc. (NYSE: CVD), Icon plc (NASDAQ: ICLR) and Kendle International (NASDAQ: KNDL) with Outperform ratings.

Wall Street's equity market has a very light schedule this week, with many investment banks and related financial organizations on summer break. Only one deal, a Secondary, may price this week:

Secondaries:

Possible

CVD Equipment (AMEX: CVV), a 2.5M share Secondary for this semiconductor equipment company. C.E. Unterberg is the lead manager.

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