Analyst upgrades:

• Jefferies upgraded Sonus Networks (NASDAQ: SONS) to Buy from Hold on valuation as they find the risk/reward compelling at current levels. Jefferies has a $2 target on the stock.
  
• Dresdner upgraded HSBC (NYSE: HBC) to Buy from hold on valuation as they believe the dividend cut is fully priced in at current levels.
  
• JP Morgan upgraded Barnes & Noble (NYSE: BKS) to Neutral from Underweight on valuation as they recommend short positions take profits at current levels.
• Kellogg (K) was raised to Buy from Neutral at UBS.
  
• RPM, Inc (NYSE: RPM) and Valspar (NYSE: VAL) were upgraded at KeyBanc to Buy from Hold.
  
• Omnicare (NYSE: OCR) was upgraded to Overweight from Equal Weight at Barclays.

Analyst downgrades:

• Jefferies downgraded Dune Energy (AXE: DNE) to Underperform from Hold to reflect weak commodity prices and the company's reduced financial flexibility. The firm lowered its target price to 10c from 30c.
• Baird downgraded NeuStar (NYSE: NSR) to Neutral from Outperform and lowered their target to $20 from $22 based on 2009 revenue concerns and the CFO's departure.
  
• UBS cut Viacom (NYSE: VIA) to Neutral from Buy and lowered its target to $18 from $27. The firm believes advertising declines will be worst than expected and that Film expectations are too high.
• Goldcorp (NYSE: GG) was lowered to Neutral from Overweight at JP Morgan.
  
• Kindred Healthcare (NYSE: KND) and Tenet Healthcare (THC) were downgraded at Barclays to Equal Weight from Overweight.
  
• Cynosure (NASDAQ: CYNO) was downgraded to Hold from Buy at Citigroup.

Analyst initiations:

• Keefe Bruyette believes Blackstone's (NYSE: BX) operating results and cash flow generation are likely to remain depressed well into 2009 given the weakening economy. The firm started shares with a Market Perform rating and $6 target.
  
• Oppenheimer views Brinks (NYSE: BCO) as a pure-play secure logistics company and feels it is well positioned to take advantage of a recent decline in acquisition prices. The firm has an Outperform rating and $32 target on the stock.
• Kellogg (NYSE: K) was initiated with a Buy rating and $52 target at Janney Montgomery.
• Avery Dennison (NYSE: AVY) was started at Barclays with an Equal Weight rating.
• Medco Health (NYSE: MHS) was initiated with a Market Perform rating and $59 target at Bernstein.

For 25 years, Steven Halpern, editor of TheStockAdvisors.com, has surveyed the leading financial newsletter advisors asking for their favorite stocks for the coming year. This article is one of 100+ ideas in the Best Stocks for 2008 report.

"My favorite more conservative idea for 2008 is Cynosure (NASDAQ: CYNO)," says Ian Wyatt, editor of The Growth Report. "The firm's non-invasive systems are used worldwide by physicians and other practitioners for applications that include the treating of pigmented lesions, acne, wrinkles and the removal of unwanted hair.

"Currently, it has over 15 product lines catering to a market that is evolving from 60,000 dermatologists and plastic surgeons to over 800,000 physicians worldwide.

"A distinguishing characteristic of Cynosure in this dynamic and competitive market is that the firm offers multi-wavelength laser systems that can be used for multiple applications versus single applications associated with single-wavelength systems.

"Demand for non-invasive aesthetic treatment procedures can be seen quite clearly in the impressive financial results. For the nine months ended September 30, 2007, Cynosure reported revenues of $87.7 million, a 63% increase over the same period of 2006. Net income was $9.2 million versus a year-earlier loss of $2.2 million.

MOST NOTEWORTHY: BMC Software, Cynosure and ADC Telecomm were today's noteworthy upgrades:

• Credit Suisse upgraded BMC Software (NYSE: BMC) to Outperform from Neutral based on an improving pricing environment for mainframe software, growth expectations, and upcoming release of IBM (NYSE: IBM) mainframe hardware.
  
• Cynosure (NASDAQ: CYNO) was upgraded to Buy from Hold at Citigroup. The firm upgraded shares after yesterday's sell-off as their checks suggest no notable reduction in demand in Q4.
  
• Merriman upgraded shares of ADC Telecommincations (NASDAQ: ADCT) to Buy from Neutral on the company's strong margin performance in Q4, prospects for growth and attractive valuation.

OTHER UPGRADES:

• Goldman added Intercontinental Exchange (NYSE: ICE) to its Conviction Buy List.
  
• Keefe Bruyette upgraded SLM Corp (NYSE: SLM) to Outperform from Market Perform.
  
• Deutsche Bank upgraded Peugeot (NASDAQ: PEUGY) to Buy from Hold.

MOST NOTEWORTHY: Aruba Networks (ARUN), the aesthetic energy devices sector and Emeritus Corp (ESC) were today's noteworthy initiations:

• JP Morgan initiated shares of Aruba Networks (NASDAQ: ARUN) with a Neutral rating. The firm believes Aruba shares are fully valued at these levels and reflects strong growth with operating leverage.Pacific Crest believes Aruba, initiated with a Sector Perform rating and $19 target, is a strong alternative to Cisco Systems (NASDAQ: CSCO) in the WLAN market and its strong position as a point vendor makes the company an attractive acquisition candidate.

• Leerink Swann estimates the aesthetic energy devices sector is likely to experience 20% revenue growth over the next five years. The firm finds Thermage (NASDAQ: THRM) a turnaround-story which has a compelling mix of revenues from disposable tips while Cynosure (NASDAQ: CYNO) is capitalizing successfully on new product cycles with Affirm and SmartLipo. Palomar Medical Technologies (NASDAQ: PMTI) is viewed as the IP leader for hair removal products; Leerink initiated Thermage and Cynosure with Outperform ratings and Palomar with a Market Perform rating.

• Emeritus Corp (AMEX: ESC) was initiated with a Buy rating and $33 target at Stifel, which believes ESC has one of the best cash earnings growth stories among any of the traded senior housing companies.

OTHER INITIATIONS:

• CE Unterberg started shares of Synchronoss (NASDAQ: SNCR) with a Buy rating and $41 target.

• Rodman & Renshaw started shares of Array Biopharma (NASDAQ: ARRY) and Tapestry Pharma (NASDAQ: TPPH) with Market Outperform ratings and an $18 target and $5 target, respectively.

• Blackstone Group (NYSE: BX) was initiated with an Overweight rating and $41 target at Morgan Stanley.

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

MAJOR PAPERS:

• The Wall Street Journal (subscription required) reported on Saturday, citing people familiar with the matter, that Google Inc (NASDAQ: GOOG) has begun a test run of serving TV commercials to cable subscribers in Concord, California. The move, said the Journal, could change the way TV ads are sold and delivered.
  
• According to the Financial Times (subscription required), Citigroup Inc (NYSE: C) is expected to announce an agreement with Nikko that will give them "effective control" over the company's core business even if they fail to win shareholder support.

OTHER PAPERS:

• The Telegraph reported that ABN Amro Holdings (NYSE: ABN) is expected to "throw a bone" at activist hedge funds that are trying to get the company to break-up or sell itself, by promising a special dividend and minor disposals next month.
• Globes reported that Teva Pharmaceutical Industries Limited (NASDAQ: TEVA) has obtained two FDA marketing approvals for its Abbreviated New Drug Application.
• Investor's Business Daily's "The New America" column mentioned Cynosure Inc (NASDAQ: CYNO), which makes anti-aging products, positively, saying the company appears to be well positioned as the "skin rejuvenation" market takes off.