Analyst upgrades:

• FBR Capital upgraded M&T Bank (NYSE: MTB) to Market Perform from Underperform following the Q3 results to reflect the company's improved earnings outlook and better credit trends. The firm has a $70 price target on shares.
• Kaufman Bros. upgraded Autodesk (NASDAQ: ADSK) to Buy from Hold as it believes a bottom has been reached in the manufacturing and construction industries. The firm raised its target on shares to $30 from $26.
• Goldman upgraded Caterpillar (NYSE: CAT) to Neutral from Sell and raised its target to $64 from $48 citing improved cost controls and construction outlook.
• Pentair (NYSE: PNR) was upgraded to Buy from Hold at KeyBanc.
• Lexmark (NYSE: LXK) was upgraded to Neutral from Underweight at JPMorgan.
• Stryker (NYSE: SYK) was upgraded to Neutral from Underperform at BofA/Merrill.

I'm reiterating my Buy rating for Murphy Oil (NYSE: MUR), first recommended on April 29, 2009 at a price of $47.80. If you bought then, you're up about 20%.

Murphy Oil remains the not-so-little-engine that could: Q2 upstream oil/natural gas production increased 18%, the company is on-track for 25-30% production growth in FY2009, and solid, double-digit gains in FY2010/FY2011.

The Obama administration's admirable goal to create a more self-reliant, energy-independent nation and the impact of efforts to first limit, then eliminate global warming from fossil fuels opens the door to alternative energy source development.

But, as Saudi Arabia reminds us, and the world, barring a breakthrough technology, fossil fuels will remain a major energy source for at least the next thirty to fifty years. In other words, the reign of oil has merely paused, not ended, which is why it's prudent to review Murphy Oil Corporation (NYSE: MUR).

While other earnings may have disappointed last week, the news was good for oil giant ConocoPhilips (NYSE: COP). In what some took as a good sign for big oil, the Houston-based company reported that third quarter net income surged 41% year over year to $3.39 per share, and that revenue also surged 52% to $70 billion. We'll see whether the good news extends to other petroleum giants scheduled to report quarterly results this week.

Analysts surveyed by Thomson Financial are looking for BP (NYSE: BP) profits to have grown 43.2% in the most recent quarter to $2.34 per share on revenue of $109.7 billion, and Chevron Corp. (NYSE: CVX) to post earnings up 39.4% to $3.25 per share on revenue of $86.8 billion. Marathon Oil Corp. (NYSE: MRO), ExxonMobil Corp. (NYSE: XOM), and Royal Dutch Shell (NYSE: RDS.A) likewise are expected to report higher net income of $2.33 per share (sales of $23.4 billion), $2.40 per share (sales of $131.4 billion), and $2.65 per share, respectively. Even Valero Energy Corp. (NYSE: VLO) is expected to post earnings slightly higher to $1.46 per share (sales of $36.4 billion), despite the effects of Hurricane Ike. Among these companies, only BP and Valero beat earnings expectations in the previous quarter. Not surprisingly, analysts on average recommend buying all except Valero, and shares of all of these companies have recently hit 52-week lows.

Analyst upgrades:

• Oppenheimer upgraded shares of Cree (NASDAQ: CREE) to Outperform from Perform as they believe LEDs are beginning to gain traction in general lighting applications.
  
• Jefferies upgraded Constellation Energy (NYSE: CEG) to Hold from Underperform following the acquisition by MidAmerican Energy. The company's target was increased to $25 from $20.
  
• RBC upgraded the Banking sector to Overweight from Underweight following the governments "massive assault" on the financial crisis. RBC believes government actions that include the potential creation of a Resolution Trust Corporation, the creation of federal insurance for money market fund investors and the ban on short selling will result in higher bank stock prices through year end; Wilmington Trust (NYSE: WL), KeyCorp (NYSE: KEY) and Pacific Capital Bancorp (NASDAQ: PCBC) were upgraded to Sector Perform from Underperform.
  
• Oracle (NASDAQ: ORCL) was raised to Buy from Neutral at Piper.
  
• UBS upgraded Murphy Oil (NYSE: MUR) to Neutral from Sell.
  
• Gap (NYSE: GPS) was upgraded to buy from Neutral at Goldman Sachs.

Analyst downgrades:

• Deutsche Bank downgraded shares of Thomson Reuters (NASDAQ: TRIN) to Sell from Buy as they believe uncertainty in the financial sector will hinder growth.
  
• Piper cut MIPS Technologies (NASDAQ: MIPS) to Neutral from Buy as they believe estimates are at risk following the departure of ChipIdea's co-founder. The company's target was lowered to $3.70 from $8.
  
• Jefferies downgraded GSI Commerce (NASDAQ: GSIC) to Hold from Buy on valuation as they view the risk/reward less compelling following the recent rally.
• Host Hotels (NYSE: HST) was downgraded at Baird to Neutral from Outperform.
  
• Wachovia downgraded Accenture (NYSE: ACN), Cognizant (NASDAQ: CTSH) and Infosys (NASDAQ: INFY) to Market Perform from Outperform.

Analyst initiations:

• Jefferies initiated Abercrombie & Fitch (NYSE: ANF) with an Underperform rating and $38 target and thinks the company's sales and margins are at risk with negative comp trends getting worse.
  
• Cantor believes Lawson Software (NASDAQ: LWSN) has a powerful franchise while the stock trades at a 33% discount to peers. Shares were assumed with a Buy rating and $8 target.
  
• Stanford started Mentor (NYSE: MNT) with a Buy rating and $32 target and thinks the company is poised to benefit from growing global demand for products and services that make people look younger and more attractive.
• Scripps Networks (NYSE: SNI) was initiated at UBS with a Neutral rating and $43 target.
  
• BMO Capital initiated Costco (NASDAQ: COST) and BJ's Wholesale (NYSE: BJ) with Market Perform ratings and a $72 target and $42 target, respectively.
  
• Isle of Capri (NASDAQ: ISLE) was initiated at Goldman with a Sell rating and $6 target.

So the earnings crunch continues, and here's a look at some companies scheduled to report results this week that are anticipated to be big winners and losers in terms of earnings growth.

Analysts surveyed by Thomson Financial expect the following to report strong earnings growth when compared to the same period of the previous year.

• Apache Corp. (NYSE: APA): $4.10 EPS (+53.9%) on revenue of $3.8 billion (+54.6%)
• EOG Resources Inc. (NYSE: EOG): $2.34 EPS (+50.0%) on revenue of $1.7 billion (+62.2%)
• Avon Products Inc. (NYSE: AVP): $0.47 EPS (+44.7%) on revenue of $2.6 billion (+11.5%)
• Goodyear Tire & Rubber Co. (NYSE: GT): $0.62 EPS (+43.5%) on revenue of $5.3 billion (+7.0%)
• Hess Corp. (NYSE: HES): $2.76 EPS (+38.4%) on revenue of $8.3 billion (+14.6%)
• Murphy Oil Corp. (NYSE: MUR): $2.19 EPS (+35.2%) on revenue of $7.8 billion (+126.2%)
• Noble Energy Inc. (NYSE: NBL): $2.08 EPS (+34.6%) on revenue of $1.0 billion (+40.1%)
• U.S. Steel Corp. (NYSE: X): $3.91 EPS (+32.0%) on revenue of $5.9 billion (+39.6%)
• Corning Inc. (NYSE: GLW): $0.49 EPS (+30.6%) on revenue of $1.7 billion (+21.3%)
• Exxon Mobil Corp. (NYSE: XOM): $2.52 EPS (+27.4%) on revenue of $144.4 billion (+46.8%)

Clearly expectations are high for oil and energy. Other companies expected to report double-digit earnings growth include Chevron Corp. (NYSE: CVX), CVS Caremark Corp. (NYSE: CVS), NYSE Euronext Inc. (NYSE: NYX), Verizon Communications Inc. (NYSE: VZ), and Aetna Inc. (NYSE: AET).

This post is part of our Big Company, Small Town series, featuring large companies and the small towns in which they are headquartered.

If you like to save money on gas and live near a Wal-Mart in the Southeast and Midwest, chances are you are filling up these days at stations operated by Murphy Oil Corp. (NYSE: MUR), which is headquartered in the small town of El Dorado, Arkansas.

Those Murphy USA gas stations, located in parking lots of Wal-Mart Stores (NYSE: WMT), are just a small part of Murphy's many energy-related businesses. Murphy Oil is a giant, publicly-traded oil and natural gas exploration and production company with operations as far afield as Malaysia and Ecuador. Much of its U.S. drilling and refining is done off the shores of Louisiana, and some of that equipment was damaged during Hurricane Katrina. Sales in 2007 were more than $18 billion and the stock is up 60% in the past year. The company was recently ranked No. 134 in the Fortune 500 (to put that in perspective, Google is ranked 150 and Nike 153).

Corporate headquarters to all this (as well as a timber company that was spun off from Murphy in 1996), is El Dorado, population of 20,000. A boom town in the 1920s when oil was discovered, El Dorado has a colorful history and currently boasts summertime reenactments of a Wild West style gun fight on the courthouse steps, as well as a historic "haunted" theater. The town participated in the federal "Mainstreet" program, which provides grants for restoring historic downtowns, suggesting that the downtown was once in rough shape, but has since been prettied up.

MOST NOTEWORTHY: Spreadtrum, Amylin Pharma and Network Equipment were today's noteworthy downgrades:

• Roth Capital downgraded Spreadtrum (NASDAQ: SPRD) to Hold from Buy and said recent checks at several Chinese handset companies indicate shipments have been weak since mid April due to sluggish demand and weak macro conditions. The firm does not expect SPRD to meet its Q2 revenue guidance and has lowered estimates and its rating.
  
• Jefferies downgraded shares of Amylin Pharma (NASDAQ: AMLN) to Hold from Buy as they believe Novo Nordisk's (NYSE: NVO) Liraglutide could prove to be greater-than-expected competition for AMLN's Byetta.
  
• Network Equipment (NYSE: NWK) was cut at ThinkPanmure to Source of Funds from Buy following the company's reduced guidance based on reduced government spending.

OTHER DOWNGRADES:

• Lehman downgraded European Stocks to Underweight from Overweight.
  
• Murphy Oil (NYSE: MUR) was cut at JP Morgan to Underweight from Neutral.
  
• Goldman downgraded Frontier Oil (NYSE: FTO) and Lumber Liquidators (NYSE: LL) to Neutral from Buy.
  
• Tekelec (NASDAQ: TKLC) was lowered to Hold from Buy at Deutsche Bank.

J.P. Morgan downgraded Murphy Oil (NYSE: MUR) from "neutral" to "underweight," according to Briefing.com. The news service writes that Frontier Oil (NYSE: FTO) was downgraded to "neutral" from "buy" at Goldman Sachs.

Briefing.com writes that AbitibiBowater (NYSE: ABH) started as Outperform at RBC Capital Markets. The website also reports that Macrovision (NASDAQ: MVSN) was raised to Buy at Piper Jaffray

Murphy Oil (NYSE: MUR), a global oil and gas exploration and production company with refining and marketing operations, will report Q4 EPS on January 31. MUR overall option implied volatility of 40 is above its 26-week average of 33 according to Track Data, suggesting larger price fluctuations.

Ultra Petroleum (NYSE: UPL) is an independent, exploration and production company with gas operations focused in the Green River Basin of southwest Wyoming. Natural Gas Futures are down 2.35% to 7.805 according to Bloomberg. UPL overall option implied volatility of 39 is above its 26-week average of 35 according to Track Data, suggesting larger price risk.

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

MOST NOTEWORTHY: British American Tobacco, Vertex Pharma and YRC Worldwide were today's noteworthy downgrades:

• ABN Amro downgraded shares of British American Tobacco (AMEX: BTI) to Hold from Buy on valuation, as they view shares as fairly valued following the strong performance in 2007.
  
• Wachovia lowered its rating on Vertex Pharma (NASDAQ: VRTX) to Underperform from Market Perform citing the potential push out of the telaprevir market launch to 2012 from 2010, which will allow the competition to grab share.
  
• The firm also downgraded YRC Worldwide (NASDAQ: YRCW) to Underperform from Market Perform, as they have little confidence in any material near-term improvement for the company.

OTHER DOWNGRADES:

• Bear Stearns downgraded Murphy Oil (NYSE: MUR) to Peer Perform from Outperform.
  
• UBS downgraded BG Group (OTC: BRGYY) to Neutral from Buy.
  
• Morgan Stanley downgraded Stancorp Financial (NYSE: SFG) to Neutral from Buy.

MOST NOTEWORTHY: Oil and gas explorers and producers, GSI Commerce and Gazprom Neft were today's noteworthy downgrades:

• Credit Suisse downgraded Devon Energy (NYSE:DVN) and Forest Oil (NYSE:FST) to Neutral from Outperform following a reduction in the firm's 2008 natural gas outlook.
  
• Jefferies downgraded shares of GSI Commerce (NASDAQ:GSIC) to Hold from Buy as they have become more cautious on margins given the company's increasingly heavy online discounting through this holiday season.
  
• Gazprom Neft (OTC:GZPFY) was downgraded to Sell from Hold at Deutsche Bank on valuation, as they believe the recent rally is not supported by fundamentals.

OTHER DOWNGRADES:

• Banc of America downgraded Marshall & Ilsley (NYSE:MI) to Neutral from Buy.
  
• Goldman downgraded Murphy Oil (NYSE:MUR) to Neutral from Buy.
  
• Mettler-Toledo (NYSE:MTD) was downgraded to Neutral from Outperform at Baird.

MOST NOTEWORTHY: Hess Corp (HES), American Home Mortgage Investment Corp (AHM) and Anglo American plc (AAUK) were today's noteworthy downgrades.

• Lehman Brothers downgraded Hess Corp (NYSE: HES) to Underweight from Equal-Weight based on valuation.
• American Home Mortgage Investment Corp (NYSE: AHM) was cut to Underperform from Market Perform at Keefe Bruyette, to Market Perform from Outperform at Friedman Billings, to Equal-Weight from Overweight at Lehman Brothers, to Sell from Hold at Citigroup and to Hold from Buy at Deutsche Bank.
• Anglo American plc (NASDAQ: AAUK) was downgraded to Underperform from Market Perform at BMO Capital Markets based on valuation.

OTHER DOWNGRADES:

• Murphy Oil Corp (NYSE: MUR) was cut to Equal-Weight from Overweight at Lehman.
• Credit Suisse downgraded Alaska Air Group, Inc (NYSE: ALK) to Neutral from Outperform.
• Gabelli downgraded shares of A. Schulman, Inc (NASDAQ: SHLM) to Hold from Buy to reflect the company's weak second-quarter.
• Raymond James downgraded Avnet, Inc (NYSE: AVT) to Market Perform from Outperform.
• Blyth, Inc (NYSE: BTH) was cut to Sell from Hold on valuation.

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