Analyst Upgrades

• Hyatt Hotels (H) and Hospitality Properties (HPT) to outperform from neutral at RW Baird.
• AB InBev (BUD) to buy from neutral at Goldman.
• Amerisafe (AMSF) to buy from hold at Wunderlich.
• Northrop Grumman (NOC) to sector perform from underperform at RBC Capital.
• China Lodging Group (HTHT) to buy from hold at Brean Murray and to buy from neutral at Roth Capital.

Analyst Upgrades

• Walgreen (WAG) and Triumph Group (TGI) to buy from neutral at UBS.
• Focus Media (FMCN) to buy from neutral at Goldman.
• Home Depot (HD) to outperform from market perform at FBR Capital.
• Arbitron (ARB) to overweight from neutral at JPMorgan.
• Waddell & Reed (WDR) and Legg Mason (LM) to overweight from equal weight, and Janus Capital (JNS) to overweight from underweight, at Barclays.
• Central Euro Media (CETV) to buy from hold at Deutsche Bank.
• GenOn Energy (GEN) and Ntelos (NTLS) to outperform from sector perform at RBC Capital.
• Cooper Tire (CTB) to buy from neutral and Goodyear Tire (GT) to buy from underperform at BofA/Merrill.

Here are some highlights from last week's earnings coverage from BloggingStocks:

• Activision Blizzard Inc. (NASDAQ: ATVI) reported better-than-expected Q2 results, sending shares higher.
• Blackstone Group (NYSE: BX) said it swung to a Q2 profit despite a dearth of leveraged buyouts.
• CBS Corp. (NYSE: CBS) Q2 earnings declined but still topped estimates, sending shares higher.
• Coinstar Inc. (NASDAQ: CSTR) reported stellar Q2 results driven by its the popularity of RedBox.
• Clorox Co. (NYSE: CLX) posted solid Q4 earnings but said revenues were flat due to currency effects.
• Duke Energy Corp. (NYSE: DUK) lower Q2 earnings beat expectations by a penny but revenue fell short.

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.

Visit AOL Money & Finance for more earnings coverage

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: 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).