Analyst Upgrades

• Kaufman Bros. upgraded Yahoo! (YHOO) to buy from hold after channel checks indicated display advertising is seeing continued improvement in pricing and demand. The firm finds the risk/reward profile on Yahoo! shares attractive at current levels and raised its price target on the stock to $20 from $19.
• Citigroup upgraded Edwards Lifesciences (EW) to buy from hold following the company's investor meeting as it believes new product launches will serve as catalysts in 2010. Citi raised its target on shares to $101 from $72.
• Deutsche Bank upgraded BWAY Holding (BWY) to buy from hold following the company's Q4 results and raised its target on shares to $22 from $17.
• Clearwire (CLWR) was upgraded to buy from sell at Soleil.
• Nokia (NOK) was raised to hold from sell at Societe Generale.
• NCR Corp. (NCR) was upgraded at JPMorgan to overweight from neutral.

Minyanville contributor Sean Udall dares to share the kind of keen insight and actionable information you won't find in any prospectus. For more original thought, visit www.minyanville.com.

• I've taken a leg in the Ultra QQQ ProShares (AMEX: QLD). The market has popped 2% off lows, the question is will it pop the full 7%?
  
  
• I'm seeing a few positive divergences and the percentage of stocks below the 50 day moving average is well below the 2002 levels. I haven't looked at the percentage of stocks below the 200 day, but I'm sure the reading should be equally distressed.
  
  
• I know people are pricing in earnings per share Armageddon in tech land -- so the question is, what happens to many of these stocks if it's really just sort of "punk" and not a total cataclysmic drop in revenue guidance.
  

MOST NOTEWORTHY: DPL Inc, IAC/InterActiveCorp, F5 Networks, Community Health and Parametric Technology were today's noteworthy upgrades:

• Baird upgraded DPL Inc (NYSE: DPL) to Outperform from Neutral following better-than-expected guidance.
  
• Citigroup upgraded IAC/InterActiveCorp (NASDAQ: IACI) to Buy from Hold as they believe HSN's turnaround, Lending Tree's stabilization and Ask's profitability ramp should drive EBITDA growth acceleration in 2008. The company was also upgraded to Overweight from Equal Weight at Lehman following IAC's better-than-expected Q3 report.
  
• Citigroup upgraded shares of F5 Networks Inc (NASDAQ: FFIV) to Buy from Hold, as they believe now is the time to buy the stock with sentiment at a low-point heading into an attractive 2008 product cycle.
  
• Stifel raised its rating on Community Health Systems Inc (NYSE: CYH) to Buy from Hold based on improved visibility from detailed 2008 guidance.
  
• Kaufman upgraded Parametric Technology Corporation (NASDAQ: PMTC) to Buy from Hold based on an impressive quarter and favorable industry trends.

OTHER UPGRADES:

• China Life Insurance Company Limited (NYSE: LFC) was upgraded to Peer Perform from Underperform at Bear.
  
• The Pep Boys - Manny, Moe & Jack (NYSE: PBY) was upgraded to Neutral from Sell at Goldman.
  
• JP Morgan added Nalco Holding Company (NYSE: NLC) to its Focus List.
  
• RBC upgraded Newmont Mining Corporation (NYSE: NEM) to Sector Perform from Underperform.

MOST NOTEWORTHY: Rockwell Automation, Barclays, F5 Networks, Foundry Networks, AMR Corp., and Red Hat were today's noteworthy downgrades:

• JP Morgan downgraded Rockwell Automation Inc (NYSE: ROK) to Neutral from Overweight based on valuation, as the firm believes the recent credit market turbulence could make a material recapitalization less likely.
  
• Bear Stearns downgraded shares of Barclays (NYSE: BCS) to Underperform from Peer Perform on valuation and expectations for losses in the company's Capital division.
  
• Nollenberger downgraded shares of F5 Networks Inc (NASDAQ: FFIV) to Neutral from Buy, as they believe the company is transitioning from a "beat and raise" story to a "meet and maintain" story given the recent disruptions in the financial services sector and slowing growth in active web hosts on the net. The firm also downgraded shares of Foundry Networks Inc (NASDAQ: FDRY) to Neutral from Buy on valuation, seeing a well balanced risk/reward profile at current levels.
  
• Soleil downgraded shares of AMR Corporation (NYSE: AMR) to Hold from Buy to reflect the company's deteriorating revenue and non-fuel cost outlook.
  
• Red Hat Inc (NYSE: RHT) was downgraded to Neutral from Outperform at Credit Suisse, citing lack of progress in execution.

OTHER DOWNGRADES:

• LDK Solar (NYSE: LDK) was downgraded at CIBC to Sector Performer from Outperformer.
  
• Friedman Billings downgraded Parker Hannifin Corporation (NYSE: PH) to Market Perform from Outperform.
  
• Morgan Keegan downgraded Cree Inc (NASDAQ: CREE) to Market Perform from Outperform.

Research in Motion (NADAQ: RIMM) volatility Elevated as RIMM closes at Record High.

RIMM is recently trading up 22 cents to $78.80 after completing a 3 for 1 stock split. RIMM is expected to report EPS on 10/4. TD Newcrest says "with AT & T (NYSE: T) having launched Apple's (NASDAQ: AAPL) iPhone with an unlimited data component costing $20/month, and believe Verizon (NYSE: VZ) and Sprint Nextel (NYSE: S) are likely to respond with price cuts to Blackberry Internet Service. This would be positive catalysts for RIMM because they would likely sell many more devices to price sensitive customers." RIMM over all option implied volatility of 50 is above its 26-week average of 41 according to Track Data, suggesting larger risk.

F5 Networks (NASDAQ: FFIV) volatility of 55 above 26-week average of 44.

FFIV, a provider of content switching application traffic solutions, is recently up $0.98 to $36.54 in pre-open trading. FFIV completed a 2 for 1 stock split on 8/20. Wedbush Morgan say's "we advise investors to remain on the sidelines as we believe the acquisition of Acopia introduces significant risks into the business." FFIV over all option implied volatility of 58 is above its 26-week average of 44 according to Track Data, suggesting larger price fluctuations.

Daily options Update is provided by Stock Specialist Paul Foster of theflyonthewall.com.

Wall Street's judgment was swift and brutal. On news of the $210 million acquisition for Acopia Networks, F5 Networks' (NASDAQ: FFIV) shares plunged 13% to $72.43.

F5 Networks develops sophisticated technologies to streamline the delivery of web applications. As networks get more congested, it's become a very lucrative market segment.

But F5 wants things to get even bigger – and hopes the deal for Acopia will be a big boost. In fact, it's F5's largest transaction in its history.

Basically, Acopia allows for enhanced management of computer files. The technology is known as file virtualization and has the potential for being a big market. Acopia not only helps make things more efficient, but even deals with things like compliance.

While it's tough to determine the size of Acopia – which is privately held – it does look like the company is still fairly small. Currently, there are about 100 customers.

What's more, the transaction is expected to be dilutive to F5's earnings, which is usually a no-no for Wall Street.

There are also some worthy competitors like Cisco Systems (NASDAQ: CSCO) and EMC (NYSE: EMC).
But, with the strength of F5, Acopia will have a better footing when trying to get new contracts.

More importantly, it does look like Acopia has standout technology (and a great management team). But the big question remains: Is there a need for the products? It's not clear that it's a must-have and that could be what's worrying investors.

Also, if you want to check out more recent M&A deals, click here.

Tom Taulli is the author of various books, including the Complete M&A Handbook and the EDGAR-Online Guide to Decoding Financial Statements.

MOST NOTEWORTHY: Specific restaurants and Autodesk (ADSK) top today's list of initiations.

• Robert W. Baird initiated coverage of Starbucks Corp. (NASDAQ:SBUX), Panera Bread Co. (NASDAQ:PNRA), Chipotle Mexican Grill, Inc. (NYSE:CMG) and Texas Roadhouse, Inc. (NASDAQ:TXRH) with Outperform ratings and P. F. Chang's China Bistro Inc (NASDAQ:PFCB) and Rare Hospitality International, Inc. (NASDAQ:RARE) with Neutral ratings.
• American Tech initiated Autodesk , Inc. (NASDAQ:ADSK) with a Buy rating and $12 target. The firm expects to see meaningful upside to 2008 consensus estimates and recommends investors to buy the stock on any pullback following Thursday's results.

OTHER INITIATIONS:

• Soleil initiated Openwave Systems, Inc. (NASDAQ:OPWV) with a Hold rating, citing unlikely outperformance due to their maturing product line and consolidating customer base.
• The Bank of America initiated F5 Networks, Inc. (NASDAQ:FFIV) with a Buy and $90 target. The firm said checks in the enterprise segment have been positive. In addition, Soleil said the company will soon enter a major product cycle with four launches.

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