Analyst Upgrades

• Philip Morris (PM) to conviction buy from buy at Goldman.
• Peet's Coffee (PEET) to neutral from sell at Janney Capital.
• Cephalon (CEPH) to equal weight from underweight at Morgan Stanley.
• StoneMor Partners (STON) to outperform from neutral at RW Baird.
• Tibco (TIBX) to buy from underperform at BofA/Merrill.
• Apollo Group (APOL) to outperform from market perform at BMO Capital.

Analyst Upgrades

• Marriott (MAR) to outperform from market perform at Wells Fargo.
• Quest Diagnostics (DGX) and Owens-Illinois (OI) to outperform from neutral at Credit Suisse.
• FirstMerit (FMER) to outperform from perform at Oppenheimer.
• Safeway (SWY) to hold from sell at Citigroup.
• Babcock & Wilcox (BWC) to buy from neutral, as well as Jacobs Engineering (JEC) and W. R. Berkley (WRB) to neutral from sell, at Goldman.
• Pioneer Natural (PXD) to overweight from equal weight at Barclays.
• Teekay Tankers (TNK) to buy from underperform at BofA/Merrill.

Things look to be pretty quiet on the economic calendar this week. Here are the highlights:

• Tuesday: Weekly chain-store sales
• Wednesday: Federal budget balance for January
• Thursday: Wholesale trade data in December
• Friday: Trade balance in December and the weekly inflation survey

However, three iconic companies -- Walt Disney (DIS), Coca-Cola (KO) and Hasbro (HAS) -- highlight this week's quarterly results. Here's a look at what analysts surveyed by Thomson Reuters are anticipating from these and others.

Analyst Upgrades

• Diamond Offshore (DO) to conviction buy from sell and Baker Hughes (BHI) to buy from neutral at Goldman.
• Frontier Communications (FTR) to outperform from market perform at Wells Fargo.
• Syntel (SYNT) to outperform from market perform at Wells Fargo, to buy from hold at Deutsche Bank and to buy from neutral at Janney Capital.
• Kulicke & Soffa (KLIC) and Fiserv (FISV) to outperform from perform at Oppenheimer.
• 3M (MMM) to neutral from underweight and Tyco (TYC) to overweight from neutral at JPMorgan.
• Collective Brands (PSS) and Nordstrom (JWN) to overweight from equal weight, as well as Foot Locker (FL) to equal weight from underweight, at Morgan Stanley.
• Amazon.com (AMZN) to buy from hold at Lazard Capital.
• Yamana Gold (AUY) to outperform from neutral at Credit Suisse.

"We will leave the debate over the relative morality of the cigarette business to others," says Geoffrey Seiler, adding "Our view is simple: it is a legal product and Philip Morris International (PM) is one of the best operators in the segment."

The editor of BullMarket.com explains, "The Philip Morris value creation model is easy to understand. While organic volumes are still slipping, the tobacco industry continues to have great pricing power.

"Thus the simple formula for the company is to raise prices, use its prolific cash flow to buy back shares, make some accretive acquisitions, increase the dividend, and repeat.

"Many growth and income investors will eventually need to start taking dividends to supplement other forms of cash flow," says Chuck Carlson, an expert in dividend reinvestment plans.

The editor of the DRIP Investor explains, "And many investors would like to receive those dividends on a regular basis. And, in fact, you can get monthly dividend check from a portfolio holding just three stocks.

One of our three value portfolios in the Buyback Letter is the Buyback Income Index, a 10-stock portfolio for those interested in income and growth. It features companies actively repurchasing their own stock that also pay relatively high dividends.

While our main emphasis is on buyback stocks, those stocks that both buy back AND pay a substantial and regular dividend are comforting to some investors who want to know that no matter what, at least they will be getting something back.

Analyst Upgrades

• Wells Fargo upgraded PG&E (PCG) to outperform from market perform and raised its range for shares to $50 to $52 from $44 to $46, citing the proposed settlement in the company's 2011 General Rate Case.
• Jefferies upgraded Huntsman (HUN) to buy from hold and raised its price target for shares to $17 from $12, citing valuation and the likelihood for favorable earnings revisions.
• RBC Capital upgraded Jack in the Box (JACK) to outperform from sector perform with a $28 target, citing checks showing improved fast food sales in recent months and easy comps.
• Sonic (SONC) was upgraded to outperform from sector perform at RBC Capital and $12 price target.
• Synaptics (SYNA) was upgraded to overweight from neutral at JPMorgan and $40 price target.
• Excel Maritime (EXM) was upgraded to buy from hold at Cantor and raised its price target to $7 from $5.

"Philip Morris International (PM), a holding on our Recommended Buy List, has caught fire with investors this summer, recently hitting a 52-week high," says Geoffrey Seiler.

The editor of BullMarket.com explains, "The company's CFO, Hermann Waldemer, was recently at an investor conference in New York, and below, we review his presentation and comments for this update on how the cigarette business has been doing outside of the U.S.

Today was one of those days that felt more dependent upon overseas markets than one of those 'must watch' days full of economic data. There was a larger-then-expected build in wholesale inventories that outpaced sales, although that wholesale trade data rarely moves markets very much.

Here were today's unofficial closing bell levels:

Dow Jones 10,462.84 +47.60 (0.46%)
S&P 500 1,109.56 +5.38 (0.49%)
Nasdaq 2,242.48 +6.28 (0.28%)

Top Analyst Upgrades & Downgrades

"Our primary purpose is to assist investors in growing their capital and income base from which to derive cash for their current and future needs," says blue chip stock specialist Kelley Wright.

The editor of Investment Quality Trends explains, "To that end we believe that high-quality stocks purchased at historically low-price-to-high-yield offers the best potential for downside protection and upside appreciation.

"The Timely Ten list of stocks is our reasoned expectation based on our methodology and experience for what we believe will perform best over the next five years.

Philip Morris International (PM - option chain) shares are rising today after the company announced this morning that it now expects to report 2010 EPS of $3.70 to $3.80, five cents lower at each end than its previous forecast but still in line with analysts' estimates of $3.77. PM cited the weaker euro for the change. If you think that the stock won't fall by too much in the coming months, then now could be a good time to look at a bullish hedged trade on PM.

PM opened this morning at $45.95. So far today the stock has hit a low of $45.90 and a high of $47.08. As of 12:30, PM is trading at $46.74 up $1.75 (3.9%). The chart for PM looks bullish and S&P gives PM a positive 4 STARS (out of 5) buy ranking.

Analyst Upgrades

• Deutsche Bank upgraded Murphy Oil (MUR) to buy from hold following the company's analyst day. In addition, the firm raised its target for shares to $70 from $59.
• SunTrust upgraded Petroleum Development (PETD) to buy from neutral based on higher price realizations. The firm has a $31 target on the stock.
• Sterne Agee upgraded P.F. Chang's (PFCB) to buy from neutral, citing valuation and SSS momentum. The firm has a $54 target on the stock.
• Royal Bank of Scotland (RBS) was upgraded to neutral from underperform at Credit Suisse.
• PepsiCo (PEP) was upgraded to conviction buy from buy at Goldman.
• Baytex Energy Trust (BTE) was upgraded to buy from speculative buy at Canaccord.
• Disney (DIS) was upgraded to hold from sell at Citigroup.

Here are some highlights from this past week's earnings coverage on BloggingStocks:

• Apollo Group Inc. (APOL) second quarter EPS guidance fell short of analysts' estimates, sending shares lower.
• CBS Corp. (CBS) higher Q4 earnings were in line with analysts' expectations but free cash flow declined.
• Deere & Co. (DE) posted higher Q1 earnings that easily topped expectations, sending shares sharply higher.
• Gap Inc. (GPS) received a downgrade from an analyst that foresees contracting earnings, returns and margins.
• Hewlett-Packard Co. (HPQ) better-than-expected Q1 results were accompanied by a better-than-expected outlook.

Analyst Upgrades

• Auriga upgraded Intel (INTC) to buy from hold to reflect the stock's relative valuation after channel checks indicated PC shipment plans continue to be solid. The firm raised its target price on shares to $24 from $20.
• Deutsche Bank upgraded RenaissanceRE (RNR) to buy from hold on valuation and believes stock buybacks and reserve releases will drive the company's growth. The firm raised its target price on shares to $65 from $59.
• UBS upgraded Philip Morris (PM) to buy from neutral based on increased confidence in its earnings outlook and relative valuation. The firm raised its target to $54 from $49.
• Chevron (CVX) was raised to outperform from market perform at Bernstein.
• Barnes & Noble (BKS) was upgraded to sell from conviction sell at Goldman Sachs.
• Deutsche Bank (DB) was upgraded to outperform from neutral at Credit Suisse.