Analyst upgrades:

• Citigroup upgraded Polaris Industries (NYSE: PII) to Buy from Hold after channel checks indicated the company's sales trends improved through September. The firm raised its target on shares to $49 from $33.
• Jefferies upgraded Citrix Systems (NASDAQ: CTXS) to Hold from Underperform after channel checks indicated IT spending will be strong in the second half of 2009, but the firm finds the stock fully valued at current levels. Jefferies raised its target on shares to $40 from $32.
• Pali Captital upgraded Abercrombie & Fitch (NYSE: ANF) to Buy from Neutral on valuation and expectations that lower pricing and international growth will be catalysts going forward. The firm set a $45 price target on shares.
• Plum Creek Timber (NYSE: PCL) was upgraded to Neutral from Underweight at JPMorgan.
• Advanced Micro (NYSE: AMD) was upgraded to Buy from Neutral at UBS.
• PPD Inc. (NASDAQ: PPDI) was upgraded to Outperform from Neutral at Baird.

Analyst upgrades:

• Keefe Bruyette upgraded Morgan Stanley (NYSE: MS) to Outperform from market Perform after transferring coverage to a new analyst. The firm expects Morgan to benefit from the pending joint venture with Smith Barney and improvements in its operating environment.
• FBR Capital upgraded Winn-Dixie (NASDAQ: WINN) to Outperform from Market Perform as it believes the company is executing well and shares are cheap at current levels. The firm keeps a $16.50 target on the stock.
• Baird believes Polaris's (NYSE: PII) consensus expectations and valuation are too low and that the company will expand beyond powersports. The firm upgraded shares to Outperform from Neutral and raised their target to $37 from $32.
• J. Crew (NYSE: JCG) was upgraded to Neutral from Sell at Goldman.
• Lexmark (NYSE: LXK) was upgraded to Equal Weight from Underweight at Barclays.
• Global Hunter upgraded Big Lots (NYSE: BIG) to Buy from Neutral.

MOST NOTEWORTHY: Evergreen Solar, Myriad Genetics and Columbia Laboratories were today's noteworthy initiations:

• Kaufman Bros. believes Evergreen Solar (NASDAQ: ESLR) is well-positioned to take advantage of a decline in raw material costs because it makes its own wafers on its own equipment. The firm started shares with a Buy rating and $18 target.
  
• Myriad Genetics (NASDAQ: MYGN) was initiated at RBC Capital with an Underperform rating and $37 target and expects negative Phase III results for Flurizan when data is presented in June.
  
• Caris believes Columbia Laboratories (NASDAQ: CBRX) has two potential high value treatments, one to prevent preterm birth and the other to treat primary dysmenorrhea. Shares were initiated with a Buy rating and $11 target.

OTHER INITIATIONS:

• McDermott (NYSE: MDR) was initiated with a Buy rating and $70 target at KeyBanc.
  
• Morgan Stanley assumed Canon (NYSE: CAJ) with an Overweight rating.
  
• Polaris Industries (NYSE: PII) was initiated at William Blair with a Market Perform rating.

No matter what the season, there is an outfit in Medina, Minnesota, that has your recreational and utility transport needs covered. Polaris Industries (NYSE: PII) is the world's #1 maker of snowmobiles and the #2 producer of four- and six-wheeled all-terrain vehicles.

Polaris also offers Victory-brand motorcycles, replacement parts, accessories, recreational clothing and finance services. Polaris has distribution facilities and dealerships across North America, Europe and New Zealand. It operates a joint engine building venture with Fuji Heavy Industries. Honda Motor Company (NYSE: HMC) is a major competitor.

Investors were pleased last week, when the company reported Q3 EPS of $1.07 and revenues of $544 million. The Street had been looking for $1.02 and $526.7 million. The sales figure was a record quarterly high. The gross margin percentage improved 160 basis points to 22.5 percent, due primarily to positive product mix and currency impacts. Management also guided FY07 EPS to $3.05-$3.10 ($3.01 consensus) and FY07 revenues to about $1.74-$1.76 billion ($1.71 billion consensus). The stock popped on the news and then passed into a bullish "flag" consolidation pattern. Prices frequently exit flags moving in the same direction they were traveling when they entered them. In this case, that would be to the upside.

Brokers recommend the shares with three "strong buys," four "buys," six "holds" and two "sells." Analysts expect a 15% average annual growth rate through the next five years. The PII P/E ratio (17.34), PEG ratio (1.19), Price to Sales ratio (1.07), Price to Cash Flow ratio (10.35), Price to Free Cash Flow ratio (17.94), Return on Assets (13.89%), Return on Investment (27.70%) and Return on Equity (42.88%) compare favorably with industry, sector and S&P 500 averages. Institutions own about 92 percent of the outstanding shares. The stock is one of those used to calculate the S&P 600 SmallCap Index. Over the past 52 weeks, it has traded between $41.97 and $58.78. A stop-loss of $45.70 looks good here.

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

MOST NOTEWORTHY: Lincare Holdings, Gentiva Health, Five Star Quality Care, Arris and U.S. Steel Group were today's noteworthy upgrades:

• Jefferies upgraded shares of Lincare Holdings (NASDAQ: LNCR) to Buy from Hold on valuation as they now believe the likelihood that Congress could severely cut Medicare oxygen reimbursement this year is priced into shares.
  
• Jefferies also upgraded Gentiva Health (NASDAQ: GTIV) to Buy from Hold on valuation, as they believe the recent sell-off is overdone.
  
• RBC Capital raised Five Star Quality Care (AMEX: FVE) to Outperform from Sector Perform, as they believe the company's Q3 report could be better than expected and that census and outlook are improving.
  
• CIBC upgraded shares of Arris Group (NASDAQ: ARRS) to Sector Outperformer from Sector Performer on valuation as they believe the weakness in the stock is overdone.
  
• Deutsche Bank upgraded shares of U.S. Steel (NYSE: X) to Buy from Hold, as they expect the company to be a major beneficiary of rising raw material costs. Further, Deutsche thinks Lone Star and Stelco will be catalysts for earnings growth in 2008.

OTHER UPGRADES:

• VeraSun Energy Corporation (NYSE: VSE) was upgraded to Overweight from Equal Weight at Morgan Stanley.
  
• UST Inc (NYSE: UST) was upgraded to Buy from Neutral at Goldman.
  
• JP Morgan upgraded BASF AG (OTC: BASFY) to Overweight from Neutral.
  
• Avondale Partners upgraded Polaris Industries (NYSE: PII) to Market Outperform from Market Perform.

MOST NOTEWORTHY: Polaris Industries, Edwards Lifesciences, BearingPoint and Fortis were today's noteworthy upgrades:

• Rochdale upgraded Polaris Industries (NYSE: PII) to Buy from Hold, as they have increased confidence in the company's ability to achieve estimates.
  
• Piper upgraded shares of Edwards Lifesciences (NYSE: EW) as they believe the bad news is behind the company with a U.S. turnaround expected in 2008.
  
• Jefferies raised shares of BearingPoint (NYSE: BE) to Hold from Underperform on valuation as they believe the risk/reward is neutral following the recent pullback.
  
• Fortis (OTC: FORSY) was upgraded to Outperform from Peer Perform at Bear Stearns. The firm upgraded shares on valuation as they believe the recent weakness is overdone.

OTHER UPGRADES:

• Goldman Sachs added Research in Motion Limited (NASDAQ: RIMM) and Commercial Metals (NYSE: CMC) to its Conviction Buy List.
• Credit Suisse upgraded Varian Semiconductor (NASDAQ: VSEA) to Outperform from Neutral.
  
• Bear upgraded Bruker Biosciences (NASDAQ: BRKR) and Hutchison Telecom (NYSE: HTX) to Outperform from Peer Perform.
  
• Banc of America upgraded Werner Enterprises (NASDAQ: WERN) and J.B. Hunt (NASDAQ: JBHT) to Neutral from Sell.

MOST NOTEWORTHY: Shutterfly (SFLY) tops today's list of initiations. JP Morgan, Jefferies and Piper Jaffray initiated Shutterfly today.

• The group of firms believe Shutterfly, Inc. (NASDAQ:SFLY) is positioned to be the dominant play in the photo-based personal publishing space, which allows for premium pricing.

OTHER INITIATIONS:

• Bank of America initiated Leisure stocks today:
  • Bank of America would buy cruise line stocks as they believe the worst is over. As such, the broker initiated Royal Caribbean Cruises (NYSE:RCL) and Carnival Corp. (NYSE:CCL) with Buy ratings.
  • The firm is also bullish on the video game cycle and initiated Activision, Inc. (NASDAQ:ATVI) and THQ Inc. (NASDAQ:THQI) with Buy ratings, Electronic Arts (NASDAQ:ERTS) and Take Two (NASDAQ:TTWO) with Neutral ratings, and recommends buying Activision and THQ Inc today.
  • Bank of America would stay out of toy stocks at current levels due to valuation, and initiated Hasbro, Inc. (NYSE:HAS) and Mattel, Inc. (NYSE:MAT) with Neutral ratings.
  • They are also cautious on powersport companies and initiated Harley-Davidson (NYSE:HOG) and Brunswick Corp. (NYSE:BC) with Neutral ratings. The bank also started Polaris Industries (NYSE:PII) with a Sell rating.

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