Analyst upgrades:

• Barclays upgraded Exxon (XOM) to overweight from equal weight based on a higher production growth outlook. The firm, which raised its target to $92 from $90, expects Exxon to have organic growth of more than 3% in 2010 and an average growth rate of 2.6% between 2009 and 2013.
• Kaufman Bros. upgraded Palm (PALM) to buy from hold citing the recent pullback in shares and indications that Verizon (VZ) will carry webOS phones as early as 1H10. The firm has a $16 target on the stock.
• Piper Jaffray raised Medicis (MRX) to neutral from underweight and raised its target to $20 from $16. Following a management meeting, Piper said they have increased confidence in Soldyn risk and LipoSonix's safety profile.
• Illinois Tool Works (ITW) was upgraded to buy from neutral at UBS.
• Devon Energy (DVN) was upgraded to outperform from market perform at Wells Fargo.
• Carmike Cinemas (CKEC) was upgraded to buy from neutral at Merriman.

Analyst upgrades:

• Merriman upgraded Smith & Wesson (NASDAQ:SWHC) to Buy from Neutral on valuation after channel checks indicated an increase in gun sales in October after an Obama win became apparent. The firm believes shares can trade up into the $4 to $5 range.
  
• Credit Suisse upgraded Wells Fargo (NYSE:WFC) to Outperform from Neutral citing the company's improved balance and potential earnings power following its $11B equity offering.
  
• JP Morgan upgraded Coca-Cola Enerprises (NYSE:CCE) to Overweight from Neutral on valuation and easing commodity and labor costs.
• Manulife (NYSE:MFC) was raised to Outperform from Sector Perform at RBC Capital.
  
• SL Green Realty (NYSE:SLG) was upgraded at UBS to Buy from Neutral.
  
• Molina Healthcare (NYSE:MOH) was upgraded to Equal Weight from Underweight at Barclays.

Analyst downgrades:

• Barclays downgraded General Motors (NYSE:GM) to Underweight from Equal Weight on cash concerns and believes any assistance from the government would substantially dilute equity holders. Barclays set a $1 target on GM shares.
  
• Stephens cut LandAmerica (NYSE:LFG) to Underweight from Equal Weight following the Fidelity National (NYSE:FNF) takeover as they expect no other bidders to emerge and believe shares could go back to under $5 if Fidelity National walks away.
  
• Deutsche Bank downgraded solar companies to reflect deteriorating fundamentals in the sector, an adequate supply of c-Si modules, the strengthening dollar and restricted access to capital. First Solar (NASDAQ:FSLR), Canadian Solar (NASDAQ:CSIQ), Energy Conversion (NASDAQ:ENER) and Sunpower (NASDAQ:SPWRA) were downgraded to Hold from Buy.
• Urban Outfitters (NASDAQ:URBN) and Aeropostale (NYSE:ARO) were downgraded to Underweight from Equal Weight at Barclays.
  
• FMC Technologies (NYSE:FTI) was lowered to Underweight from Neutral at JP Morgan.

Analyst initiations:

• Freeport McMoRan, HLS Systems, and Kimberly Clark were today's noteworthy initiations:
  
• Banc of America expects Freeport McMoRan's (NYSE:FCX) earnings will decline sharply in 2009 and thinks the dividend could be at risk. Shares were initiated with a Neutral rating and $29 target.
  
• Roth Capital initiated HLS Systems (NASDAQ:HOLI) with a Buy rating and $5 target. The firm is positive on the company's management team and the company's outlook for EPS growth.
  
• Citigroup thinks Kimberly Clark's (NYSE:KMB) margins have bottomed and that the current valuation is too low. Shares were assumed with a Buy rating and $65 target.
• Synaptics (NASDAQ:SYNA) and Intercontinental Exchange (NYSE:ICE) were initiated at Merrill Lynch with Neutral ratings.
  
• Tim Hortons (NYSE:THI) was assumed with a Sell rating at Goldman.

Tim Hortons (NYSE: THI) can't seem to get enough of bad PR lately.

Only two weeks ago Canada was in an uproar when Tim Hortons fired a single mother employee from a London, Ontario location because she gave a child a free Timbit (a doughnut center). Tim Hortons has since rehired the woman.

Then, on Wednesday, Teresa Lee, a Good Samaritan who happens to be a Toronto investment manager, bought breakfast for a pregnant homeless woman. When she was about to leave and go to her job, an employee admonished her, saying the homeless woman cannot stay to eat the purchased breakfast in the restaurant. According to the employee, "Tim Hortons at King and Victoria Sts. does not let homeless people eat inside, even if they are eating Tim Hortons food, because they 'make a mess.'"

Well, the chain claims it has no policy on the treatment of the homeless. Since 95% of the Tim Hortons stores in Canada are independent franchises, it is up to franchises to "make delicate judgment decisions when dealing with any disruptive customers to ensure the store is pleasant, comfortable and safe." Tim Hortons has apologized to Lee, the investment manager, but failed to apologize to the homeless woman.

It's quite surprising to see Tim Hortons, which has been called "a Canadian icon of best practices from a franchising perspective," getting it so wrong lately. Tim Hortons is a Canadian icon, not just from business perspective, but from a cultural one too.

If there was one thing Tim Hortons definitely didn't need to learn from Starbucks (NASDAQ: SBUX), it was this. Starbucks had a few incidents involving homeless and bad PR itself. Tim Hortons has hurt its brand image with this negative publicity. So while indeed it comes down more often than not to judgment calls, those calls have been wrong of late. Perhaps Timmies should have a specific company policy on the treatment of the homeless after all.

I remember the last time I had a burger at a McDonald's Corp. (NYSE: MCD) restaurant. It was two and a half years ago and I just couldn't stomach it. After the first bite, it went into the garbage with me feeling utterly nauseous. Yet, even I, a person who purports to eat healthy, don't boycott McDonald's altogether. While I had the last McDonald's burger on that fateful day, I came back for breakfasts, the salads and even the coffee. Indeed, I am not embarrassed to admit that I prefer it to Starbucks' (NASDAQ: SBUX) coffee, though not to Tim Hortons' (NYSE: THI).

Well, it seems that McDonald's has indeed managed to offer something for everyone, even granolas like me. The results could be seen in its latest reported same-store sales report, which have continued the fast food chain's hot streak. McDonald's global sales from restaurants open more than a year rose 5.9% in September. The world has been kinder to McDonald's than its domestic sales. While U.S. sales rose 3.5% -- increasing consecutively for the 54th month -- same-store sales rose 5.7% in Europe and 12% in its Asia/Pacific, Middle East and Africa division. Its total systemwide sales rose 11.5% for the month and 11.8% for the quarter.

Following these impressive numbers, the company now expects to exceed Wall Street's estimates for third-quarter profit. It now expects to earn 83 cents per share in the quarter when it reports October 19. Including a 6 cents per share gain from the sale of Boston Market, it should report 89 cents per share for the quarter, beating estimates.

No doubt, the company has found a way to offer something for everyone. Its value menu, breakfast offerings and drinks helped boost sales, as did premium coffee. The long hours, the promotions and new products like the wraps I occasionally enjoy, also drove sales growth.

McDonald's shares are trading up 29 cents to $56.54, 0.52% higher. This isn't perhaps the surge some had hoped for, but as the company has been doing so well, much of that surprise was already priced in. MCD shares have gained nearly 28% year-to-date and over 34% the past year. It may just continue this performance a while longer, especially as it encroaches further on Starbucks' business.

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I recently blogged about how I love Darden Restaurants, a company with strong fundamentals and very popular, casual dining chains like Olive Garden and Red Lobster. Even when people are getting squeezed by higher gas prices, the drop in the market, and rising interest rates, they still will treat themselves to a meal out at their favorite, fairly affordable restaurant. What about other casual dining chains?

I'm a little bit less bullish on Tim Hortons (NYSE: THI), even though Tim Hortons has a solid breakfast business (its mainstays are coffee and baked goods, with additional soups and sandwich offerings), and like Darden, has fairly strong fundamentals. While breakfast chains tend to suffer less when wallets are pinched, I think its presence in the U.S. is not strong enough to give it real legs in the U.S. marketplace, and this will hurt it as the economy staggers.

THI is a huge success in Canada, where is originated. There, it now dominates the fast food space -- with a staggering 24% market share -- and more restaurants than even McDonald's. In 2007, it plans to open 120-140 more restaurants. It captures repeat guests, and has made a solid brand for itself by serving quality, fresh food and great coffee. Its stock has benefited from the growing strength of the Canadian dollar of late, and it has excellent cash flow.

MOST NOTEWORTHY: Toll Brothers (TOL), COTT Corp (COT), Tim Hortons (THI) and Linktone (LTON) were today's noteworthy downgrades:

• Banc of America downgraded shares of Toll Brothers (NYSE: TOL) to Sell from Neutral, citing expected deterioration in luxury sales due to mortgage distress in the marketplace.

• COTT Corp (NYSE: COT) was cut to Hold from Buy at Stifel, citing the difficult macro environment and continued profit declines.

• Tim Hortons (NYSE: THI) was downgraded to Neutral from Buy at Goldman, citing valuation, and notes that fundamentals remain favorable.

• Montgomery cut Linktone (NASDAQ: LTON) to Hold from Buy, citing the sudden decline in its wireless VAS revenues following Q2 results...

OTHER DOWNGRADES:

• Banc of America downgraded Hovnanian (NYSE: HOV) and Standard Pacific (NYSE: SPF) to Neutral from Buy.
  

• Merrill Lynch cut AutoNation (NYSE: AN) and American Axle (NYSE: AXL) to Sell from Neutral.

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

MOST NOTEWORTHY: Steven Madden, Ltd (SHOO), Expedia, Inc (EXPE), Oracle Corp (ORCL) and Tim Horton's Inc (THI) round up today's noteworthy upgrade list:

• Steve Madden, Ltd (NASDAQ: SHOO) was upgraded to Buy from Neutral at Nollenberger as they believe Madden is well positioned going into the back half of 2007 with clean inventories and focused products.

• Matrix believes increasing marketing efforts and European growth are contributing to significant improvement in fundamental trends for Expedia Inc (NASDAQ: EXPE), and upgraded shares to Hold from Sell.

• Pacific Crest upgraded shares of Oracle Corp (NASDAQ: ORCL) to Outperform from Sector Perform to reflect improved channel checks and the probability of continued success.

• CIBC upgraded Tim Horton's (NYSE: THI) to Sector Outperformer from Sector Performer based on valuation...

OTHER UPGRADES:

• Banc of America upgraded Intersil Corp (NASDAQ: ISIL) to Buy from Neutral.

• Bear Stearns upgraded Illumina, Inc (NASDAQ: ILMN) to Outperform from Peer Perform.

• Buckingham raised Kohl's Corp (NYSE: KSS) to Strong Buy from Neutral.

• Matrix USA raised Titanium Metals Corp (NYSE: TIE) to Buy from Hold.

• Merrill Lynch upgraded Kulicke and Soffa Industries Inc (NASDAQ: KLIC) to Buy from Neutral.

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

MOST NOTEWORTHY: Time Warner Cable (TWC) and Molecular Insight Pharmaceuticals (MIPI) were today's more notable initiations:

• Time Warner Cable (NYSE: TWC) was initiated at Bernstein with an Outperform rating and $46 target, citing a compelling diversification alternative for cable/CMCS investors. Goldman started Time Warner Cable with a Neutral rating and $44 target.

• Molecular Insight Pharmaceuticals Inc (NASDAQ: MIPI) was initiated at RBC with an Outperform rating and $18 target. RBC said Molecular Insight is a leader in developing and commercializing superior radiopharmaceuticals for the treatment and management of life-threatening diseases. Jefferies initiated shares of Molecular Insight with a Buy rating and $20 target, saying Zemiva has blockbuster potential.

OTHER INITIATIONS:

• UBS started Amedisys, Inc (NASDAQ: AMED) with aBuy rating and $39 target.

• Goldman Sachs initiated TransCanada (NYSE: TRP) with a Buy rating.

• Credit Suisse initiated Tim Hortons Inc (NYSE: THI) with an Outperform rating.

• Pacific Growth initiated Ormat Technologies, Inc (NYSE: ORA) with a Buy rating.

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

Tim Hortons Inc. (NYSE:THI), the Canadian coffee-and-doughnut chain, had an unbelievable day. THI shares, which debuted only in March 2006, closed the day up 6.82%, or $2.00, to $31.31. 52-week range (since the IPO): $23.79-$33.00.

Tim Hortons opened its first restaurant in Hamilton, Ontario in 1964 and currently has 2,637 restaurants in Canada and 305 in the U.S. In 1995 it merged with Wendy's International Inc. (NYSE:WEN) but was fully spun off as a separate company in September 29, 2006.

Today, the company said that same-store sales grew 10.9-11% percent in Canada and 9.5% in the U.S. in December. For the fourth quarter, same-store sales grew 9.3% in Canada and 8.3% in the U.S. For the full year, Canadian store sales were up 7.5% in Canada and 8.9% in the United States.

If you've ever been to Canada, I'm sure you've come across a Tim Hortons. You can't have missed these coffee shops; they're all around the country. Like Canadian Tire, Tim Hortons truly has become a Canadian cultural icon as its seems the northeners' taste buds differ a bit from their neighbors to the south. In fact, I can walk ten minutes from my house and find two Timmy's, but to get to a Starbucks, I'd have to try harder. And quite frankly I do prefer Tim Hortons' coffee to Starbucks Corp.'s (NASDAQ:SBUX) coffee. It's no wonder Tim Hortons holds 62% of the Canadian coffee market.

Like other coffee chains, Tim Hortons is expanding its menu and during the quarter, the company introduced a breakfast sandwich in Canada and promoted its chili and garlic toast in the U.S. and Canada. Personally, I was never a big fan of their food, but I know I'm the exception in this matter.

Ask a Canadian and he'll tell you -- Timmy's rocks!

MOST NOTEWORTHY: Dreamworks Animation (DWA), Boeing (BA), and Tim Hortons (THI) top today's short list of upgrades.

• DreamWorks Animation, Inc. (NYSE:DWA) was upgraded by Merrill Lynch to Buy from Neutral. The firm believes shares are positioned to outperform given the stronger slate of releases, including Shrek 3, and the removal of the secondary overhang.
• Boeing Co. (NYSE:BA) was upgraded by Matrix USA to Strong Buy from Hold, citing fundamentals and valuation.
• Goldman Sachs added Tim Hortons, Inc. (NYSE:THI) to their Americas Conviction Buy List. Following the completion of Wendy's spin-off, Goldman believes continued earnings power, strong SSS and buybacks can drive shares to their $34 target.

OTHER UPGRADES:

• @Road, Inc. (NASDAQ:ARDI) was upgraded to Strong Buy from Buy at First Albany based on the company's strong backlog and positive cash flows.
• Prudential upgraded Charles Schwab Corp. (NASDAQ:SCHW) to Overweight from Neutral as the firm prefers wholesale capital markets and sees Schwab as a pure-play retail capital market beneficiary.

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