Analyst Upgrades

• Disney (DIS) to buy from hold at Wunderlich.
• Pike Electric (PIKE) to outperform from market perform at FBR Capital.
• Kindred Healthcare (KND) to overweight from equal weight at Barclays.
• UBS (UBS) to hold from sell at Canaccord.
• Avery Dennison (AVY) and Take-Two (TTWO) to buy from neutral at BofA/Merrill.
• Mercer (MERC) to outperform from market perform at Raymond James.

It looks like John Paulson wants to get ahead of the crowd. He and other large homebuilders are buying prime building lots in states like Arizona, Colorado and Nevada.

The big players like Lennar Corp (LEN), Standard Pacific Corp. (SPF), KB Home (KBH), DR Horton (DHI) and Toll Brothers (TOL) are all grabbing lots at bargain basement prices.

The Federal Reserve's first Beige Book report of the year is due out this week. The report is a compilation of anecdotal information on current economic conditions from each of the 12 Federal Reserve Bank districts. The data comes from interviews with business contacts, economists, market experts, and other sources. The previous report, released in December, showed modest improvement in eight of the districts, while the October report confirmed that the economy was stabilizing after earlier declines.

Much of the focus this week will no doubt be on the FOMC meeting on interest rates and the subsequent decision, as well as on the G-20 meeting in Pittsburgh, were the agenda will include bonuses for bank executives among other things.

Things will be fairly quiet again on the earnings front as the next earnings season has yet to ramp up. However, analysts surveyed by Thomson Reuters do have high hopes for a handful of companies that will release results this week.

Lennar (NYSE: LEN), whose colleagues include Toll Brothers (NYSE: TOL) and D.R. Horton (NYSE: DHI), reported earnings for the second quarter on Thursday. Since it is a homebuilder, you can expect that it would be a tough one to look at in many respects. There was a revenue decline of over 20%. And there was no profit. Lennar said it lost 76 cents per diluted share.

According to Michael Fowlkes and his earnings preview, Lennar did not satisfy Wall Street's outlook. Analysts were expecting a loss somewhere closer to 63 cents per share. That didn't stop the stock from going up, though. Lennar closed higher yesterday by over 17%. Volume was likewise incredible. Apparently, the market was focusing on the revenue beat.

This week brings a small flurry of end-of-the-calendar-quarter earnings reports. And for the most part, the expectations of the analysts surveyed by Thomson Reuters aren't very high. Companies expected to report declining earnings in the most recently concluded quarter include America's Car-Mart Inc. (NASDAQ: CRMT), Bed Bath & Beyond Inc. (NASDAQ: BBBY), ConAgra Foods Inc. (NYSE: CAG), Jabil Circuit Inc. (NYSE: JBL), Jackson Hewitt Tax Service Inc. (NYSE: JTX), Monsanto Co. (NYSE: MON), and Sonic Corp. (NASDAQ: SONC).

Given last week's news that new home sales have plunged and that new home prices continue to fall, what is Wall Street expecting from homebuilders Centex Corp. (NYSE: CTX), Pulte Homes Inc. (NYSE: PHM), and DR Horton Inc. (NYSE: DHI) when they report quarterly results this week?

Analysts surveyed by Thomson Reuters anticipate that Dallas-based Centex will report that it narrowed its net loss in its fiscal third quarter to $3.27 per share. In the same period of last year, the loss was $7.94 per share. Revenue in the third quarter is expected to total $895.3 million, down 53.0% from last year. For the full year, the loss is expected to reach $7.36 per share on revenue of $4.0 billion, which compares to a $21.69 per share loss on $8.3 billion in sales in 2008. Centex has posted bigger-than-expected losses in the past five quarters. So the consensus recommendation of analysts remains to hold CTX, though the long-range EPS growth forecast is 9.0%. The share price has fallen 20.0% just since the beginning of the year, and it is 70.7% lower than it was a year ago. Centex suspended its quarterly dividends back in October.

Here are some highlights from this past week's earnings coverage from BloggingStocks:

• American Eagle Outfitters Inc. (NYSE: AEO) saw lower Q3 results in the tough retail envirnoment.
• Analog Devices Inc. (NYSE: ADI) Q4 profit surged but it lowered its Q1 forecast due to slowing orders.
• Borders Group Inc. (NYSE: BGP) had dismal Q3 results and said it had ceased its quest to sell itself.
• Campbell Soup Co. (NYSE: CPB) solid Q1 results beat estimates but shares fell despite a market rally.
• Deere & Co. (NYSE: DE) fell short of Q4 profit expectations and guidance was below estimates.
• Dollar Tree Inc. (NASDAQ: DLTR) had a bigger-than-expected Q3 profit and raised its full-year outlook.
• D.R. Horton Inc. (NYSE: DHI) reported a wider Q4 loss as home sales revenue declined by 50%.
• Hewlett-Packard Co. (NYSE: HPQ) posted strong Q4 numbers that didn't quite match the preliminary results.
• Salesforce.com Inc. (NYSE: CRM) had strong results and an optimistic forecast despite economic conditions.
• Starbucks Corp. (NASDAQ: SBUX) lowered its fiscal 2009 forecast and warned of further restructuring.
• Tiffany & Co. (NYSE: TIF) Q3 earnings declined but topped expectations, and it announced staff reductions.
• Warner Music Group Corp. (NYSE: WMG) Q4 earnings beat expectations though revenues fell slightly.
• Xerox Corp. (NYSE: XRX) forecast a full-year profit in line with estimates and said it is confident in its liquidity.

Upcoming earnings releases include Sears (NASDAQ: SHLD), Staples (NASDAQ: SPLS), Aeropostale (NYSE: ARO), Del Monte Foods (NYSE: DLM), Guess (NYSE: GES), Novell (NASDAQ: NOVL), Toll Brothers (NYSE: TOL), Big Lots (NYSE: BIG), Royal Bank of Canada (NYSE: RY).

Visit AOL Money & Finance for more earnings coverage.

The earnings season is beginning to wind down as we have passed the halfway mark of the quarter and the holiday season begins in earnest next week with Thanksgiving in the United States.

Bermuda-based Frontline Ltd. (NYSE: FRO) is anticipated by analysts surveyed by Thomson Reuters to be one of the biggest earnings gainers among companies scheduled to report quarterly results this coming week. The oil tanker fleet operator is expected to post third-quarter earnings of $1.97 per share, 86.8% higher than in the same period a year ago, on revenues of $399.5 million (+44.6%). Frontline missed estimates by 6.4% in the previous quarter, and the consensus recommendation by analysts is to hold FRO. While Motley Fool likes its robust dividend, Jim Cramer said in a recent Lightning Round that he prefers rival Nordic American Tanker Shipping Ltd. (NYSE: NAT). Shares have fallen 52.9% in the past three months, and reached a 52-week low of $25.00 on Friday.

Analog Devices Inc. (NYSE: ADI) is also expected to be among the week's biggest earnings gainers. Analysts are looking for the semiconductor chip maker to report a fiscal fourth-quarter profit of $0.44 per share, 31.8% higher than a year ago, on revenues of $661.7 million (+2.0%). Analog Devices has beat estimates in three of the past five quarters, but only missed by 1.3% in the previous quarter. Analysts on average recommend buying ADI, which has a forecast long-term EPS growth rate of 17.3%, which better than the S&P 500 and that of rival Texas Instruments Inc. (NYSE: TXN). Shares sank to a multiyear low of $16.23 on Friday, and are down 41.1% in the past three months.

KB Home (NYSE: KBH), whose colleagues include D.R. Horton, Inc. (NYSE: DHI) and Lennar Corporation (NYSE: LEN), reported earnings for the third quarter on Friday, and as one might have expected, they weren't the stuff of Wall Street dreams. This article gives a nice summary of the release. The loss per share worsened like crazy during the quarter compared to the year-ago data. The loss this year was $1.87 per share, and that was about four times the amount lost in the year-ago period. One thing to keep in mind, however, is that, on a non-GAAP basis in the previous year, the loss was $6.19 per share. The disparity here was caused by the addition of gains from discontinued operations in Q3 2007. No matter, expectations were for $1.22 per share for the current quarter, so KB Home nevertheless missed by a wide margin.

What fascinates me about KB Home is how the stock rebounded from its intraday low. I expected to see the shares in the dumps as I began to write this piece. Interestingly enough, as of this writing, shares are actually up over 1%! I wasn't the only one to notice this phenomenon. Dividend.com also mentioned how interesting the strong price action has been. In fact, at the time of this writing, AOL Finance says that KB Home's stock is up over 16% for the three-month period and up over 20% for the one-month period. What is this telling me? Does this mean I should buy the stock? I also should point out that the stock is not languishing at the 52-week low, either.

Well, it would have been pretty scary to buy KB Home at the 52-week low. But, I say it is kind of scary to buy KB Home now. If you think there is strength with this stock, then I say, at the very least, you've got to wait until it comes down before even thinking of buying. I just can't get myself to consider this homebuilder after seeing it miss estimates. Plus, we aren't out of the bad housing slump yet. The price action does give me pause, and I concede that you have to consider the effect of the discontinued operations on last year's earnings number. Still, it is my opinion that staying away from KB Home is best for now. The final decision, however, is yours.

Disclosure: I don't own any company mentioned; positions can change at any time.