Analyst upgrades:

• Calyon upgraded major network carriers based on falling oil prices and capacity cuts. The analyst is positive over the next 12 months but cautious short-term given the uncertain economy, and volatile markets and oil prices. AMR Corp (NYSE: AMR) and Delta Air (NYSE: DAL) were upgraded to Add from Neutral and UAL Corp (NASDAQ: UAUA) was raised to Neutral from Reduce.
• Ryanair (NASDAQ: RYAAY) was upgraded at Citigroup to Buy from Hold.
• Boardwalk Pipeline (NYSE: BWP) was raised to Buy from Hold at Deutsche Bank.
• Cowen lifted Biogen Idec (NASDAQ: BIIB) to Outperform from Neutral.
• JP Morgan upgraded Choice Hotels (NYSE: CHH) to Neutral from Underweight following the better-than-expected Q3 report.
• Oppenheimer upgraded shares of Integra LifeSciences (NASDAQ: IART) to Outperform from Perform on valuation, the company's minimal exposure to economic conditions, and expectations for margin improvement and a rebound in organic growth.

Analyst downgrades:

• Sherwin-Williams (NYSE: SHW) and AerCap Holdings (NYSE: AER) were downgraded to Neutral from Overweight at JP Morgan.
• UBS downgraded Embarq (NYSE: EQ) to Neutral from Buy following the CenturyTel (NYSE: CTL) merger announcement.

MOST NOTEWORTHY: Select pharmaceutical companies, timber companies and Kona Grill Inc (NASDAQ: KONA) and were today's noteworthy initiations:

• Medarex Inc (NASDAQ: MEDX) was initiated with a Positive rating at Susquehanna. The firm said Medarex has multiple drivers include a potential buyout by one of its existing partners, as well as clinical progress and the success of its technology platform in monoclonal antibody therapeutics.
• Susquehanna also initiated shares of Dyax Corporation (NASDAQ: DYAX), Millennium Pharmaceuticals Inc (NASDAQ: MLNM), and Idera Pharmaceuticals Inc (AMEX: IDP) with Neutral ratings and Dynavax Technologies Corporation (NASDAQ: DVAX) and Coley Pharmaceutical Group Inc (NASDAQ: COLY) with Positive ratings.
• Rayonier Inc (NYSE: RYN), Plum Creek Timber Company Inc (NYSE: PCL) and Weyerhaeuser Company (NYSE: WY) were initiated with Buy ratings at Merrill Lynch.
• Kona Grill was initiated with an Outperform rating at Cowen. The firm believes Kona can grow its asset base 10-fold at strong store-level cash-on-cash ROICs.

OTHER INITIATIONS:

• Jefferies initiated shares of Input/Output Inc (NYSE: IO) with a Buy rating and $19 target.
• Goldman Sachs initiated shares of Minerals Technologies Inc (NYSE: MTX) with a Buy rating and $80 target.
• JP Morgan initiated shares of Orexigen Therapeutics Inc (NASDAQ: OREX) with an Overweight rating and is positive on the company's obesity pipeline.

MOST NOTEWORTHY: The more noteworthy companies initiated today were ValueClick, Inc (VCLK), Delta Air Lines, Inc (DAL), 24/7 Real Media, Inc (TFSM), Knology, Inc (KNOL) and Allos Therapeutics, Inc (ALTH):

• Banc of America believes ValueClick Inc (NASDAQ: VCLK) is well-positioned for continued strong secular online ad growth and initiated shares with a Buy rating and $35 target.

• Lehman is positive on Delta Air Lines (NYSE: DAL) valuation and earnings growth, starting shares with an Overweight rating and $26.50 target.

• Banc of America believes 24/7 Real Media's (NASDAQ: TFSM) valuation is full at current levels and started shares with a Neutral rating and $12 target.

• RBC believes shares of Knology (NASDAQ: KNOL) are fairly-valued and would wait for a pullback, initiating shares with a Sector Perform rating.

• ThinkEquity started Allos Therapeutics (NASDAQ: ALTH) with a Buy rating and expects significant news flow data on PDX in 2007-2008. In addition, the firm expects to hear an update on enrollment from the PROPEL study, which could be ahead of expectations, and Phase I data in NSCLC in the fall...

OTHER INITIATIONS:

• Goldman resumed coverage with Mylan Laboratories (NYSE: MYL) and Exco Resources, Inc (XCO) with Neutral ratings.

• Merrill Lynch resumed coverage of News Corp (NYSE: NWS) with a Buy rating.

• Lehman started Input/Output, Inc (NYSE: IO) With an Overweight rating and $18 target.

• Needham started Vasco Data Security International, Inc (NASDAQ: VDSI) with a Hold rating.

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

Kenneth Reid notes in its most recent earnings call, Schlumberger cited seismic services are the most rapidly growing segment in its business. To play this trend, the editor of The Spear Security Industry Analyst focuses on a company that specializes in the sector -- Input/Output (NYSE: IO).

He explains, "Seismic surveys shoot sound waves into the earth or seabed and analyze the reflections to locate the oil and gas reserves below.

The company was founded in 1968 but according to Reid, has been tranforming itself in recent years to become a provider of a full range of seismic imaging products and services.

Its product lines now includes advanced seismic acquisition equipment, along with the software, data processing services and data libraries necessary for modern land and deep-sea oil and gas exploration.

And while the company sells products for traditional 2D and 3D surveys, Reid is particularly impressed with the company's move into sophisticated time-lapse (4D) and full-wave imaging. Using a grid of more than a thousand sensors, the system produces high definition images of rock structures, natural fractures and the fluids in underground reservoirs."

He notes that the technology is already in demand. I/O sold $60 million worth to the national oil company of India and has an even larger project underway with Chinese energy firm Sinopec, he explains. He also notes that over the last year, I/O worked with British Petroleum in Wyoming and a major project for Apache is just starting month in Texas.

He adds, "This is an advanced technology that has yet to be fully deployed and it is the reason we think I/O has a particularly bright future."

Beyond the technology itself, he likes the company's growing global market. He notes that the Houston firm's footprint now includes offices Canada, Latin America, Europe, China, Russia, Africa and the Middle East.

He concludes, "We think I/O will reward investors over the balance of 2007 and beyond."

For more stock picks from the leading financial newsletter advisors, visit Steven Halpern's free daily website, TheStockAdvisors.com.

Input/Output Inc. (NYSE:IO) is a leading seismic services provider, offering seismic acquisition equipment, software, planning and data processing to the global oil and gas industry. The firm pleased investors last week when it announced that it had been awarded a $60+ million contract to provide seismic imaging systems to the Oil and Natural Gas Corporation of India. Shares popped on the news and then moved into a bullish "flag" consolidation pattern. Equities frequently leave a flag with a move in the same direction they were traveling when they entered it. In this case, that would be to the upside.

Brokers recommend the issue with one "strong buy" and one "sell." Analysts expect a 73 percent average annual growth rate, through the next five years. The IO PEG ratio (0.55), Price to Sales ratio (2.25), Price to Book ratio (3.00), Price to Cash Flow ratio (12.67), Price to Free Cash Flow ratio (31.28), Sales Growth rate (38.33%) and EPS Growth rate (100.00%) compare favorably with industry, sector and S&P 500 averages. The stock is one of those used to calculate the S&P 600 SmallCap Index. Institutions own about 95 percent of the outstanding shares. Over the past twelve months, IO has traded between $6.75 and $13.87. Should you decide to invest, consider a stop-loss of $11.60. Note that the firm is next expected to report quarterly results in early February.

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