Analyst Upgrades

• Goldman upgraded Reliance Steel (RS) to buy from neutral and The Buckle (BKE) to neutral from sell.
• RAM Energy (RAME) was upgraded to outperform from market perform at Rodman & Renshaw.
• RBC Capital upgraded H&E Equipment (HEES) and Cameco (CCJ) to outperform from sector perform, and Denison Mines (DNN) to sector perform from underperform.
• Alexandria Real Estate (ARE) was upgraded to overweight from neutral at JPMorgan.
• Investment Technology (ITG) was upgraded to outperform from neutral at Wedbush.

Analyst upgrades:

• Citigroup upgraded shares of Sovereign Bancorp (NYSE: SOV) to Buy from Hold on their belief Sovereign will merge with Banco Santander (NYSE: STD) according to the terms on their October 13 agreement.
  
• Jefferies upgraded Whole Foods (NASDAQ: WFMI) to Hold from Underperform on valuation as they believe the capital infusion from Leonard Green limits downside risk. The company's target was raised to $11 from $9.50.
  
• Banc of America upgraded Max Capital (NASDAQ: MXGL) to Buy from Neutral on valuation, the company's strategic changes to lower earnings volatility and their belief it is well positioned to benefit from an improved P&C marketplace.
• Qimonda (NYSE: QI) was upgraded to Neutral from Underperform at Cowen.
  
• Health Net (NYSE: HNT) was raised to Neutral from Sell at Goldman.
  
• Parkway Properties (NYSE: PKY) was lifted to Market Perform from Underperform at Wachovia.

Analyst upgrades:

• Merriman upgraded shares of Netezza (NYSE: NZ) to Buy from Neutral following the company's solid Q2 results as they believe it is well-positioned for strong operating results heading into 2H09.
  
• JP Morgan raised Cabot (NYS: CBT) to Overweight from Neutral. The firm expects 2009 to be a better year given lower raw material costs and higher contract prices.
  
• JP Morgan also upgraded Royal Ahold (OTC: AHONY) to Overweight from Neutral on valuation.
  
• Liberty International (OTC: LBYIY) was upgraded to Hold from Sell at Deutsche Bank.
  
• BMO Capital upgraded Royal Bank (NYSE: RY) to Market Perform from Underperform and Bank of Montreal (NYSE: BMO) to Outperform from Market Perform.

• Jefferies downgraded shares of Constellation Energy (NYSE: CEG) to Underperform on Hold on concerns the company will come under increasing pressure to issue equity. The firm lowered its target to $60 from $71.
• Thomas Weisel downgraded Williams-Sonoma (NYSE: WSM) to Market Weight from Overweight citing continued macro pressures.
  
• Wachovia has concerns that Kayne Anderson's (NYSE: KED) book value will be pressured by its investment in ProPetro Services, trading losses associated with SemGroup, and negative developments at Quest Midstream. The firm cut shares of Kayne to Market Perform from Outperform.
• Energy Conversion (NASDAQ: ENER) was downgraded to Neutral from Buy at Piper.
  
• Deutsche Bank cut International Paper (NYSE: IP) and Domtar (NYSE: UFS) to Hold from Buy.
  
• H&E Equipment (NASDAQ: HEES) was lowered at Credit Suisse to Neutral from Outperform.

• Morgan Stanley yesterday initiated Elan Corp (NYSE: ELN) with an Overweight rating. The firm sees a low-probability of a Tysabri withdrawal.
  
• ThinkPanmure views On Semiconductor (NASDAQ: ONNN) as a nice turnaround story with opportunities for shares gains in notebooks and consumer gaming platforms. Shares were initiated with a Buy rating and $14 target.
• Petrohawk Energy (NYSE: HK) was assumed with an Outperform rating at Morgan Keegan.
  
• Regency Energy (NASDAQ: RGNC) was initiated at Merrill Lynch with a Neutral rating.

Ever wonder how your local construction company can afford those big earthmovers and cranes it uses all over town? The odds are it does not own them at all. It rents. A leader in sales and rental of the heavy equipment is headquartered in Baton Rouge.

H&E Equipment Services (NASDAQ: HEES) provides heavy construction and industrial equipment, dealing in industrial lift trucks, aerial platforms, cranes and earthmovers. It rents and sells new and used equipment and also provides repair and maintenance services. Customers include construction contractors, manufacturers, public utilities, municipalities, maintenance contractors and other large industrial concerns. The firm serves nearly 28,000 U.S. accounts.

H&E surprised the Street last week, when it reported Q3 EPS of 53 cents and revenues of $270.6 million. Analysts had been expecting 45 cents and $243.3 million. Management also guided FY07 revenues to $0.995-$1.0 billion ($944.12M consensus) and announced a $100 million stock repurchase program. The CEO noted that a recent mid-Atlantic acquisition was expected to generate" significant growth opportunities." HEES shares broke through 30-day/50-day moving average resistance on the news and has now begun to form a bullish "pennant" consolidation pattern. Prices frequently exit pennants moving in the same direction they were traveling on entry. In this case, that would be to the upside.

Brokers recommend the issue with one "strong buy," three "buys" and one "hold." Analysts see a 17% growth rate, through the next year. The HEES P/E ratio (10.61), Price to Sales ratio (0.78), Price to Book ratio (2.55), Price to Cash Flow ratio (4.36), Sales Growth rate (32.58%), EPS Growth rate (17.78%), Return on Assets (7.94%), Return on Investment (12.87%) and Return on Equity (27.32%) compare favorably with industry, sector and S&P 500 averages. Institutional investors hold about 50% of the outstanding shares. Over the past 52 weeks, the stock has traded between $15 and $30.59. A stop-loss of $16.70 looks good here.

Larry Schutts is a contributing editor for Theflyonthewall.com and the Vice-President of Stockwinners.com.

If necessary, most of us could probably find a place to rent a T.V. If our needs ran more toward aerial lifts, industrial hoists and excavators, though, what then? Well, there is a firm headquartered in Baton Rouge that has them shined up and waiting.

H&E Equipment Services Inc. (NASDAQ: HEES) is a heavy equipment services company, operating 48 facilities throughout the United States. The firm rents out aerial platform equipment, cranes, earthmoving vehicles and industrial lift trucks. It also sells new and used equipment and provides maintenance services. Customers include industrial concerns, construction contractors, public utilities and municipalities. H&E deals with equipment from numerous manufacturers, including Caterpillar (NYSE: CAT), Ford (NYSE: F), Deere (NYSE: DE) and Hitachi (NYSE: HIT).

The company had good news for investors last week, when it reported Q1 EPS of 32 cents and revenues of $209.7 million. Analysts had been expecting 29 cents and $205.6 million. Management also guided FY07 EPS to $1.63-$1.85 ($1.82 consensus) and FY07 revenues to $900-$920 million ($901.22M consensus). Banc of America Securities subsequently reiterated its "buy" recommendation on the issue and raised its price target to $30.