Jefferies upgraded shares of Safeway (NYSE: SWY) to Hold from Underperform on valuation as they believe the company's pricing pressure and sluggish sales trends are now priced in. The firm raised its target to $23.50 from $21.
Merrill upgraded Pfizer (NYSE: PFE) to Buy from Underperform citing attractive dividend yield and stabilizing businesses.
Banc of America upgraded shares of Apollo Group (NASDAQ: APOL) to Neutral from Sell and raised APOL's target to $60 from $48 on valuation as they see a balanced risk/reward at current levels.
Nucor (NYSE: NUE) was raised to Overweight from Equal Weight at Morgan Stanley.
Ericsson (NASDAQ: ERIC) was upgraded to Add from Hold at WestLB.
JP Morgan upgraded Shire Plc (NASDAQ: SHPGY) to overweight from Neutral to reflect Vyvanse share gains and valuation.
Wachovia upgraded Jefferies (NYSE: JEF) to Market Perform from Underperform because they believe that the recent collapse of the large cap bank sector, Jefferies' cash equity business, and the company's partial privatization as a result of its Leucadia investment will shield shares.
ADC Telecomm (NASDAQ: ADCT) was upgraded to Buy from Hold at Kaufman Bros. on valuation following the recent weakness.
STEC Inc (NASDAQ: STEC) and Popular (NASDAQ: BPOP) were raised to Buy from Neutral at B. Riley.
Analyst downgrades:
Merrill downgraded Disney (NYSE: DIS) to Underperform from Neutral and cut its target to $27 from $34 citing the impact from the current economic climate on earnings.
Barclays downgraded IBM (NYSE: IBM) to Equal Weight from Overweight citing the impact from the weakening economy and the company's large exposure to the financial services industry. IBM's target was cut to $108 from $130.
Jefferies downgraded Salesforce.com (NYSE: CRM) to Underperform from Buy on increased risks of deteriorating payment terms and price pressure on renewals. The company's target was lowered to $36 from $75.
Goldman downgraded First Solar (NASDAQ: FSLR) and added shares to the Conviction Sell List.
Jefferies Group Inc. (NYSE: JEF), a middle market investment bank, showed that it can deal with the treacherous credit crunch. While its latest quarterly report showed a 16% drop in revenues to $392 million, it wasn't as bad as the Street expected (the consensus estimate was $275 million). Taking out some charges, earnings came to $0.04 per share (the Street estimate was a loss of $0.16).
The major weakness came from the investment banking. However, there was strength on the trading side, such as with junk bonds.
Basically, Jefferies has taken a number of steps to maintain liquidity and protect its capital base. In fact, in April the company got a $434 million capital infusion from Leucadia National.
MOST NOTEWORTHY: Jefferies Group, Quality Systems and Techwell were today's noteworthy initiations:
Friedman Billings initiated Jefferies Group (NYSE: JEF) with a Market Perform citing the difficult underwriting environment and challenging credit market.
JMP Securities initiated Quality Systems (NASDAQ: QSII) with an Outperform rating and $35 target. The firm expects the company's practice management and electronic medical record solutions to benefit from growth opportunities within the ambulatory market.
Techwell (NASDAQ: TWLL) was assumed with an Overweight rating and $14 target at Thomas Weisel, as they expect TWLL to have continued stable revenue growth given its market leadership and increased global security demand.
OTHER INITIATIONS:
Bernstein initiated NetSuite (NYSE: N) with a Market Perform rating and $23 target.
Keefe Bruyette started Comerica (NYSE: CMA) with a Market Perform rating and $37 target.
However, things didn't hold up. In November and December, Jefferies suffered some big setbacks. While Jefferies expects net earnings of $140 million for 2007, the fourth quarter will have a net loss of $24 million, or $0.17 per share.
What happened? Well, Jefferies had issues with two principal trading efforts. There were also problems with the junk bond department. Oh, and there were some postponements of investment banking deals.
Simply put, the markets are experiencing extreme volatility (which was certainly evident last week). No doubt, this makes it pretty tough for firms like Jefferies.
The good news is that Jefferies has a strong capital base and has no need for outside capital infusions. Besides, the firm has taken great efforts to diversify its business (going beyond just a pure broker).
But with investors extremely jittery right now, such things are not being considered – at least in the short-run.
Word is that there's more than one bid out for the satellite radio company. We know about the merger agreement with Sirius Satellite Radio Inc's (NASDAQ: SIRI), so who's the other party? Or, is there another party? Some are convinced it's just talk. No names are even floating around. But for XM to walk away from Sirius would cost them a $175M break-up fee. They'd have to really be serious about another offer to do that.
In May, Robert L .Chapman of Chapman Capital, the "activist investor", said Building Materials Holding Corp. should consider selling all or parts of itself. Then he upped his stake to 8.1% in the residential construction services provider. Now comes word that the company may have hired, or be in the process of hiring, a strategic advisor.
Juniper Networks Inc.(NASDAQ: JNPR) -- volatility and call volume Elevated on unconfirmed Speculation. JNPR, a provider of Internet infrastructure solutions to Internet service providers and other telecommunication services providers, is recently up $0.58 to $25.75 on renewed and unconfirmed takeover chatter. JNPR is scheduled to report EPS in mid July. JNPR call option volume of 6,716 contracts compares to put volume of 2,312 contracts. JNPR July option implied volatility is at 41 & August is at 40, above its 26-week average of 36 according to Track Data, suggesting larger price risks.
Jeffries Group Inc.(NYSE: JEF) -- volatility and volume Elevated on renewed and unconfirmed speculation. JEF is recently up $0.73 to $27.71. JEF has been mentioned frequently as a takeover target over the last three months. JEF July option implied volatility of 48 is above its 26-week average of 41 according to Track Data, suggesting larger risk.
MOST NOTEWORTHY: Google (GOOG), Yahoo! (YHOO), Apple (AAPL), Cash Systems (CKNN) and Citrix (CTXS) were today's noteworthy initiations:
Oppenheimer believes Google Inc (NASDAQ: GOOG) is the largest beneficiary of the secular growth trends in Internet advertising and transitioned coverage with a Buy rating and $625 target.
Oppenheimer also believes the current price of Yahoo! (NASDAQ: YHOO) is an attractive entry point given the company's number one position in display advertising and the recent successful launch of Panama. The firm transitioned coverage of Yahoo! with a Buy rating and $34 target.
RBC Capital sees continued upside for Apple Inc (NASDAQ: AAPL) based on achieving its 10M goal for iPhone, upside from Mac momentum and maintaining iPod/iTunes dominance helped by new products, and started shares with an Outperform rating and $160 target.
Merriman believes Cash Systems (NASDAQ: CKNN) is positioned to gain meaningful share in the casino cash access industry through the near-term introduction of powercash and started shares with a Buy rating.
Friedman Billings believes Citrix's (NASDAQ: CTXS) latest Presentation Server product release has some near-term risk given raised prices and initiated shares with a Market Perform rating and $35 target...
OTHER INITIATIONS:
ValueClick (NASDAQ: VCLK) was initiated at Oppenheimer with a Buy rating.
MOST NOTEWORTHY: Marvel Entertainment, Inc (MVL), Electronic Arts Inc (ERTS), ION Media Networks Inc (ION), Allscripts Healthcare Solutions, Inc (MDRX) and Tenet Healthcare Corp (THC) were today's noteworthy downgrades:
JP Morgan downgraded Marvel Entertainment (NYSE: MVL) to Neutral from Overweight based on the lack of near-term catalysts.
Gabelli downgraded Electronic Arts (NASDAQ: ERTS) to Hold from Buy on reduced 2008 expectations. The firm expects Electronic to lose market share given the lack of Q1 product launches.
CRT downgraded ION Media Networks (AMEX: ION) to Sell from Buy and recommends taking profits at these levels as shares are approaching Citadel LP's offer of $1.46 per share.
F5 Networks(NASDAQ: FFIV) -- implied volatility collapses on EPS; FFIV rallies 20%. FFIV, a provider of content switching application traffic solutions, is recently up $13.06 to $79.22. WEDB says "Q2 exceeds expectations; continued growth to come." FFIV May option implied volatility of 34 is below its 26-week average of 42 according to Track Data, suggesting decreasing price fluctuations.
Jeffries Group (NYSE: JEF) -- option implied volatility Up to 42; on speculation Risk. JEF, an investment bank engaged in financial product execution services and asset management, is recently up 08 cents to $30.19. JEF has been frequently mentioned as a takeover target. JEF call option volume of 2,194 contracts compares to put volume of 231 contracts. JEF May option implied volatility of 42 is above its 26-week average of 31 according to Track Data, suggesting larger price risks.
United Rentals(NYSE: URI) -- implied volatility & volume increases into EPS & on speculation. URI, the largest equipment rental company in the world, is recently up 96 cents to $33.69. URI will report EPS on 5/3. URI call option volume of 2,347 contracts compares to put volume of 406 contracts. URI May 35 calls are bid 75 cents above its theoretical value of 35 cents. URI May & June option implied volatility of 38 is above its 26-week average of 35 according to Track Data, suggesting slightly more risk.
The investment bank may be a takeover target. MassMutual, or Massachusetts Mutual Life Insurance Co., may be the pursuer. Could make sense. Jefferies has lots of clients; MassMutual has big bucks. Back in the good old days of 2004 they actually worked together on a corporate lending venture. The two CEOs are buddies. We don't know if that's means fishin', huntin' or bridge. But buddies talk, don't they? Jefferies' stock is clearly on the rise. WEATHERFORD INTERNATIONAL LTD (NYSE: WFT)
Now that Halliburton Company (HAL) has finished up in Iran, and is done with KBR, word is that they have oil and gas equipment and services provider Weatherford in their sights. That can't be too hard seeing that they have a lot in common and both operate out of Houston. Weatherford's shares have been trading in the high 40s, up some, higher than the lows and lower than the highs of the last many weeks. Not much has happened in the last few days, but maybe it's because those good 'ol boys are deciding whose barbeque place to meet at. USG CORP. (NYSE: USG)
This one's been around for a while now, and it's worth noting that it's still around, and may be for a while longer. The stock seems poised for a breakout. Is Berkshire Hathaway's Warren Buffett about to make his move? "Yes, hello. I'm calling with a few questions for Mr. Buffett, please...yes, I'll wait..."
Jeffries Group (NYSE: JEF) -- implied volatility flat on heavy call volume on renewed chatter. JEF, an investment bank engaged in financial product execution services and asset management, is recently up $.41 to $27.91 on renewed speculative takeover chatter. Merrill Lynch (NYSE: MER) has been frequently mentioned as interested in JEF. Keefe Bruyette says we "maintain our Outperform rating as we believe JEF has done an excellent job diversifying, expanding and growing its existing businesses as well as entering new ones." JEF call option volume of 4,986 contracts compares to put volume of 393 contracts. JEF May option implied volatility of 33 is near its 26-week average according to Track Data, suggesting non-directional price risks.
Google Inc. (NYSE: GOOG) -- April straddle at $21.90 into 4/19 EPS & Outlook; indicates Risk. GOOG will report EPS after the close of trading on 4/19. Piper has a $630 price target on GOOG. GOOG call option volume of 22,964 contracts compares to put volume of 14,716 contracts. GOOG May option implied volatility of 32 is near its 26-week average of 34 according to Track Data, suggesting non-direction risk after EPS.
.gif){kind=logo}
Analyst upgrades:
.gif){kind=logo}
Back in mid-October, things were tracking nicely for investment bank 
and 
. He also operates .gif){kind=logo}
Juniper Networks Inc.
.gif){kind=logo}
Before the bell: Stock futures lower ahead of jobs report, retail sales data
Fed expects unemployment rise into 2010; GDP to fall in 2009
Cramer on BloggingStocks: Cramer bullish on the Dow for '09 -- Part III 
