Analyst Upgrades

• Yingli Green (YGE) to outperform from market perform at Wells Fargo.
• National Semiconductor (NSM) to outperform from market perform at FBR Capital.
• DuPont (DD) to buy from hold at Citigroup.
• Blackboard (BBBB) to overweight from neutral at JPMorgan.
• Kindred Healthcare (KND) to buy from hold at Jefferies.
• Peabody Energy (BTU) to outperform from market perform at BMO Capital.
• Savvis (SVVS) to buy from neutral and InterActiveCorp (IACI) to neutral from underperform at BofA/Merrill.

Sonic Solutions (SNIC) announced Wednesday that is plans to compress sweet, sweet music by acquiring DivX (DIVX) in a $323 million stock and cash deal.

This is a fantastic move for Sonic -- especially if you believe smart phones and iPads are the future of media -- because it will allow the company to expand its online and mobile media reach by combining its Roxio product line with the DivX codec (video and audio compression/decompression software) library and the DivX Player application.

Best Buy (NYSE: BBY) may be the world's largest electronics retailer, but it realizes that it faces a huge threat to a hefty chunk of its business. Apple (NASDAQ: AAPL) is moving plenty of movies and other soon-to-be former DVD fare through iTunes, staking a claim on a business that once belonged to Best Buy. The big box store is getting ready to fight back (finally?).

Using technology it's licensing from Sonic Solutions (NASDAQ: SNIC), Best Buy is opening an online store for movies and television shows. Best Buy CEO Brian Dunn says this move will expand the company's presence in services and will bolster company loyalty. That's the press release version, of course. The reality is that Best Buy needed to do something to protect this portion of its revenue and probably should have made the move several years ago.

MOST NOTEWORTHY: Sonic Solutions led today's downgrade list:.

• Kaufman Brothers downgraded the digital media software maker Sonic Solutions (NASDAQ:SNIC) to Hold from Buy, following checks indicating that consumers are buying electronics but not computers; the firm also noted that the consumer release of Microsoft Corporation's (NASDAQ:MSFT) Vista will likely be used by early adapters, and expects further consumer adoption in the second-half of 2007.

OTHER DOWNGRADES:

• Baird downgraded Saul Centers (NYSE:BFS) to Neutral from Outperform on valuation, with a $55 target.

• Shiloh Industries (NASDAQ:SHLO) was downgraded by Matrix USA to Sell from Hold based on slowing sales.

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

MOST NOTEWORTHY: Cisco (CSCO), and Sonic Solutions (SNIC) top today's modest-sized list of initiations.

• Cisco Systems, Inc. (NASDAQ:CSCO) was upgraded to Buy from Neutral at UBS following the company's strong first-quarter earnings and guidance.
• JP Morgan upgraded Sonic Solutions (NASDAQ:SNIC) to Overweight from Neutral following the weak second-quarter results and light third-quarter guidance. The firm said weak PC demand ahead of the Vista launch has already been priced into shares of Sonic Solutions.

OTHER UPGRADES:

• Watson Pharmaceuticals, Inc. (NYSE:WPI) was reinstated with a Sector Performer rating, up from an Underperformer rating, citing valuation.
• Urban Outfitters, Inc. (NASDAQ:URBN) was upgraded to Buy from Hold at Roth Capital. The firm said expectations for Urban have come down this quarter and that news going forward is likely to be positive, not negative.

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