Analyst Upgrades

• Janney Montgomery upgraded MasterCard (MA) to buy from neutral. The firm has a $250 price target on the stock.
• Lazard upgraded Frontline (FRO) to hold from sell following the better than expected Q1 report.
• Knight Capital (NITE) was upgraded at BMO Capital to outperform from market perform. The firm cites valuation and improved fundamentals for the downgrade. The firm has an $18 price target on the stock.
• Royal Dutch Shell (RDS.A) was upgraded to overweight from equal weight at Barclays.
• Carnival (CCL) was upgraded to neutral from sell at Goldman.
• Computer Sciences (CSC) was upgraded to buy from hold at Stifel Nicolaus.

Though by some estimates, consumer spending has topped its 2008 peak (really!) there is no denying that many businesses are still offering rock-bottom prices to lure shoppers out of their shells. You can now add convenience store chain 7-Eleven to the list.

The company just announced that it will be offering a lower-priced private label beer in an effort to connect with Americans looking for a cold brew this summer. The label is called "Game Day," and will be produced by City Brewing of Wisconsin -- a facility that joined up with Boston Beer (SAM) in 2007 to craft its flagship Sam Adams lager.

MOST NOTEWORTHY: Molson Coors, Knightsbridge Tankers and the Railroad sector were today's noteworthy upgrades:

• Banc of America upgraded shares of Molson Coors (NYSE: TAP) to Buy from Neutral as they believe the company's joint venture with SABMiller (OTC: SBMRY) could nearly double North American profits and that risks are largely priced in shares.
  
• Jefferies upgraded shares of Knightsbridge Tankers (NASDAQ: VLCCF) to Buy from Hold on valuation and finds the dividend yield attractive at 12.4%.
  
• Bear raised the Railroad Sector to Overweight from Market Weight. The firm upgraded Burlington Northern Santa Fe (NYSE: BNI), Canadian National Railway (NYSE: CNI) and Union Pacific (NYSE: UNP) to Outperform from Peer Perform citing valuations and the belief that rail volumes are close to a bottom.

OTHER UPGRADES:

• Morgan Stanley upgraded Royal Bank of Scotland (NYSE: RBS) and HSBC Holdings (NYSE: HBC) to Equal Weight from Underweight.
  
• Goldman upgraded China Unicom (NYSE: CHU) to Buy from Neutral.
• Deutsche raised DuPont (NYSE: DD) to Buy from Hold.

The latest sales update from SABMiller PLC (OTC: SBMRY) demonstrates why the company has partnered with Molson Coors to form MillerCoors. In the relatively flat U.S. market, SAB will look to the cost savings of shared operations to sweeten its earnings. SABMiller's North American sales in the first half of 2007 have risen only 1.4%, when the impact of the recent purchases of Sparks and Steel Reserve are backed out. Its Miller Light product fared slightly better, recovering from the damage inflicted in the U.S. market by Anheuser-Busch's (NYSE: BUD) earlier price drop to finish up 2.1% in the first half of this year. New products including Miller Cheleda and Leinenkugel are performed well.

Internationally, the company is looking to the success of new brands such as its popular Hanza Marzen Gold in South Africa to offset the blow of losing the brewing and distributing rights to Heinken's Amstel brand in that country. SAB's growth in Central and South America continued to be strong, up 8% in the second quarter. The Africa and Asia markets, which accounted for 12% of the company's EBITA last year, were also up by 20%, led by a 22% increase in China.

Beer giants SABMiller (OTC: SBMRY) and Molson Coors (NYSE: TAP) took a huge step toward grabbing market share in North America by announcing today their intention to combine U.S. operations into a new company, MillerCoors. The new entity will start with combined U.S. sales of of 69 million barrels of suds, net revenues around $6.6 billion and combined EBITDA of $842 million. The companies expect combined production and distribution to lop off around $500 million from the annual expense side within three years. SAB and TAP also expect the move to boost both companies' EPS within the second year after integration is complete.

Voting interest in MillerCoors will be split 50/50, and the new company will be chaired by Peter Coors of Molson Coors. SABMiller, the larger of the two, will have a 58% financial interest.

MOST NOTEWORTHY: Getty Images (GYI), Jackson Hewitt (JTX), Electronic Data (EDS), RC2 Corp (RCRC) and Chipotle Mexican Grill (CMG) were today's noteworthy downgrades:

• Deutsche Bank cut Getty Images (NYSE: GYI) to Sell from Hold citing deterioration in its core business. Gabelli downgraded Getty Images to Hold from Buy after the company lowered guidance to reflect the changing industry dynamics.

• Goldman cut Jackson Hewitt (NYSE: JTX) to Sell from Neutral citing near-term risks that include the renegotiation of the HSBC (HBC)/RAL contract, the DoJ/IRS investigation, and decreasing performance in tax.

• Jefferies downgraded Electronic Data Systems (NYSE: EDS) to Hold from Buy to reflect the company's slowing cash flow improvement.

• Wedbush downgraded RC2 Corp (NASDAQ: RCRC) to Buy from Strong Buy on the lower sales forecast for 2007. Soleil cut shares to Hold from Gradually Accumulate to reflect uncertainty over the Thomas recall and increased competition.

• Chipotle Mexican Grill (NYSE: CMG) was downgraded to Market Perform from Outperform based on valuation...

OTHER DOWNGRADES:

• Lazard downgraded Kyphon (NASDAQ: KYPH) to Hold from Buy.

• SMH Capital cut Aventine Renewable Energy (NYSE: AVR) to Sell from Neutral.

• Credit Suisse downgraded AutoDesk (NASDAQ: ADSK) to Neutral from Buy.

• UBS cut SABMiller (OTC SBMRY) to Reduce from Neutral.

• CIBC downgraded Marvell Tech (NASDAQ: MRVL) to Sector Performer from Outperformer.

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