Analyst Upgrades

• Boeing (BA) to overweight from neutral at JPMorgan.
• Alcoa (AA) to buy from hold at Deutsche Bank.
• BP (BP) to outperform from market perform at Raymond James.
• Office Depot (ODP) and Staples (SPLS) to buy from neutral at Janney Capital.
• ON Semiconductor (ONNN) to buy from hold at Citigroup.
• Kennametal (KMT) and Polyone (POL) to buy from hold at KeyBanc.
• Airgas (ARG) to outperform from market perform at William Blair.
• EchoStar (SATS) to neutral from underperform at Macquarie.

Analyst Upgrades

• Deutsche Bank upgraded Southern Copper (SCCO) to buy from hold to reflect valuation and positive near-term catalysts. The firm raised its target for shares to $38 from $35.
• JMP Securities upgraded Ultimate Software (ULTI) to outperform from market perform. The firm cites the company's expanding employee base for the upgrade. The firm has a $40 target on the stock.
• Piper Jaffray upgraded Aeropostale (ARO) to neutral from underweight following the company's Q4 results and raised its target for shares to $31 from $24.
• Kennametal (KMT) was upgraded to sell from conviction sell at Goldman.
• Lifetime Brands (LCUT) was upgraded to outperform from market perform at Barrington.
• Volvo (VOLVY) was upgraded to overweight from underweight at JPMorgan.

Analyst Upgrades

• Kaufman Bros. upgraded Amazon.com (AMZN) to buy from hold as it finds the risk/reward on shares attractive following the recent pullback and expects the company to report strong Q4 results. Kaufman maintains a $155 price target on the stock.
• Baird upgraded DeVry (DV) to outperform from neutral and raised its target to $76 from $62. The firm said they have increased confidence in DeVry's ability to navigate through the ERP implementation.
• Benchmark Co. upgraded McGraw-Hill (MHP) to buy from hold on expectations the company's momentum should continue throughout 2010 due to improving debt markets, increased IPO issuance and steady education funding. The firm raised its target price on shares to $42 from $32.
• Best Buy (BBY) was upgraded to buy from neutral at Rochdale.
• AK Steel (AKS) was upgraded to buy from neutral at Goldman.
• Cooper Industries (CBE) was raised to buy from neutral at UBS.

Analyst Upgrades

• Canaccord upgraded BHP Billiton (BHP) to buy from hold. The firm expects BHP Billiton to emerge from the downturn with better operating margins and less dependence on an economic recovery. The firm also upgraded Rio Tinto (RTP) to buy from neutral but expects BHP Billiton to outperform near-term.
• Keefe Bruyette upgraded Raymond James (RJF) to market perform from underperform after raising estimates to reflect higher revenues and lower loan loss provisioning. Despite the upgrade, the firm remains cautious on the stock.
• Goldman upgraded InterActiveCorp (IACI) to buy from neutral. The firm upgraded shares based on improved momentum for its Search and ServiceMagic units and its belief that Ask.com may be an acquisition target. The firm believes Microsoft (MSFT) could be a logical acquirer for the unit once it receives approval for the Yahoo! (YHOO) partnership.
• Baidu.com (BIDU) was raised to buy from hold at Deutsche Bank.
• Symantec (SYMC) was upgraded to outperform from market perform at Wells Fargo.
• Brookdale Senior Living (BKD) was upgraded to equal weight from underweight at Barclays.

Analyst Upgrades

• FBR Capital upgraded Bank of America (BAC) to outperform from market perform to reflect its positive view of the company's $20.5M common equity raise and $45B TARP repayment. The firm believes the $20.5B capital raise is lower than some expected and that Bank of America could potentially announce a new CEO by year-end. FBR raised its price target on shares to $20 from $15.
• JPMorgan upgraded Kennametal (KMT) to overweight from neutral. The firm, which has a $30 target on the stock, cites the recent pullback in shares and believes increased industrial production in 2010 could be a positive catalyst for the company.
• Credit Suisse upgraded Ternium (TX) to outperform from neutral and raised its target to $40 from $31. The firm upgraded shares based on expectations for further improvements in profitability.
• G-III Apparel (GIII) was upgraded to overweight from market weight at Thomas Weisel.
• Cubist Pharma (CBST) was raised to outperform from sector perform at RBC Capital.
• AvalonBay (AVB) was upgraded to neutral from sell at Goldman.

Analyst upgrades:

• Natixis expects Alcatel-Lucent's (NYSE: ALU) results to improve in 2H09, driven by the CDMA segment and completion of Lucent integration. Shares were upgraded to Buy from Reduce.
• RBC Capital upgraded Canadian Pacific (NYSE: CP) to Outperform from Sector Perform and raised its target to $67 from $49. The firm expects a return to "normalized" operating environment driven by Potash and MetCoal.
• Credit Suisse upgraded Affiliated Managers Group (NYSE: AMG) to Outperform from Neutral and raised its target to $69 from $64. The firm cites valuation, potential upside from 2H09 deals, and expectations for positive 2H09 flows for the upgrade.
• Kennametal (NYSE: KMT) coverage was assumed with a Neutral from Underweight at JPMorgan.
• Cardinal Financial (NASDAQ: CFNL) was upgraded to Outperform from Neutral at Baird.
• General Maritime (NYSE: GMR) was upgraded to Outperform from Market Perform at FBR Capital.

Analyst upgrades:

• Citigroup upgraded Adtran (NASDAQ: ADTN) to Buy from Hold on expectations the company will benefit from the broadband Stimulus funds.
• Morgan Stanley upgraded Continental Airlines (NYSE: CAL) to Overweight from Equal Weight based on relative valuation and views the company as a "survivor." Additionally, the analyst lowered 2009 industry estimates but believes it is the last cut for the year and is incrementally more positive on the sector.
• Morgan Stanley also upgraded EXFO Electro-Optical (NASDAQ: EXFO) to Overweight from Market Weight based on valuation.
• Tata Motors (NYSE: TTM) was upgraded to Buy from Hold at Deutsche Bank.
• Ascent Solar (NASDAQ: ASTI) was upgraded to Neutral from Underweight at JP Morgan.
• Mechel Steel (NYSE: MTL) was upgraded to Neutral from Underperform at Credit Suisse.

In his Validea newsletter, John Reese selects stocks using the investment strategies of the market's leading gurus, such as Benjamin Graham, John Neff, Warren Buffett, David Dreman, and Peter Lynch.

The advisor, and author of the just-published The Guru Investor, recently ran a screen based on the investment strategy of Kenneth Fisher to find his latest buy recommendation -- Kennametal (NYSE: KMT).

Reese explains, "For decades, the price-to-earnings ratio has been the most widely used valuation measure for stock investors, and a key tool in the arsenals of many of the gurus I follow. ut in 1984, Kenneth Fisher sent a shockwave through the P/E-conscious investment world.

MOST NOTEWORTHY: Allegheny Tech, Carpenter Tech, Haynes, Motorola and Machinery stocks were today's noteworthy downgrades:

• JP Morgan downgraded Allegheny Tech (NYSE:ATI), Carpenter Tech (NYSE:CRS) and Haynes (NASDAQ:HAYN) to Neutral from Overweight based on the decline in nickel prices and its impact on nickel-based metals demand on valuation, as they find the risk/reward less attractive following the recent rally and increased raw material costs.
  
• Oppenheimer downgraded shares of Motorola (NYSE:MOT) to Underperform from Perform after channel checks indicated the company could miss Q2 handset guidance and continued market share losses.
• UBS said the risk/reward profile for owning Machinery stocks given macro challenges and valuations. The firm downgraded Caterpillar (NYSE:CAT) and Kennametal (NYSE:KMT) to Sell from Neutral and United Rentals (NYSE:URI) and RSC Holdings (NYSE:RRR) to Neutral from Buy. Additionally, shares of Paccar (NASDAQ:PCAR) were cut to Sell from Neutral and Navistar (OTC:NAVZ) was downgraded to Neutral from Buy due to weak U.S. truck demand.
  

OTHER DOWNGRADES:

• Jefferies cut Hercules Inc (NYSE:HPC) to Hold from Buy.
  
• Goldman downgraded Pfizer (NYSE:PFE) and DirecTV (NASDAQ:DTV) to Neutral from Buy.
  
• Regeneron (NASDAQ:REGN) was downgraded to Neutral from Outperform at Credit Suisse.

MOST NOTEWORTHY: The machinery industry, Sohu.com (SOHU), Intuit (INTU), Priceline.com (PCLN) and Expedia (EXPE) were today's noteworthy initiations:

• JP Morgan assumed coverage of 5 machinery stocks: The firm assumed Eaton (NYSE: ETN) and Illinois Tool Works (NYSE: ITW) with Overweight ratings and Ingersoll-Rand (NYSE: IR), Parker Hannifin (NYSE: PH) and Kennametal (NYSE: KMT) with Neutral ratings. JP Morgan's top picks in the group are Illinois Tool Works and Eaton.

• Pali initiated Sohu.com (NASDAQ: SOHU) with a Buy rating and $41 target and believes the Olympic Games represent the biggest growth catalyst for the company.

• Jefferies started shares of Intuit (NASDAQ: INTU) with a Buy rating and $34 target, likes the momentum in TurboTax and QuickBooks and sees potential upside fo FY08 expectations.

• Banc of America initiated Priceline.com (NASDAQ: PCLN) with a Buy rating and $96 target and is positive on the company's European positioning given expectations for top line growth and margin expansion. The firm also started shares of Expedia (NASDAQ: EXPE) with a Buy rating and $35 target, positive on the company's strong management, solid competitive positioning and improving fundamentals.

OTHER INITIATIONS:

• First Albany assumed coverage of Cougar Biotechnology (OTC: CGRB) with a Buy rating and $29 target.

• Oppenheimer started shares of Virginia Commerce (NASDAQ: VCBI) with a Neutral rating.

• Omega Financial (NASDAQ: OMEF) was initiated at Keefe Bruyette with a Market Perform rating and $25 target.

• Merrill Lynch initiated shares of Insulet (NASDAQ: PODD) with a Buy rating.

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