Analyst upgrades:

• Citigroup upgraded Schlumberger (NYSE: SLB) to Buy from Hold on valuation and the company's exposure to a potential upturn in international drilling. The firm raised its target on shares to $80 from $56.
• UBS upgraded Allegheny Tech (NYSE: ATI) to Buy from Neutral and raised its target to $43 from $31 and believes the end of jet engine and other destocking will result in an initial recovery into 2010, even before an order ramp into 2011.
• Merriman upgraded Acorda Therapeutics (NASDAQ: ACOR) to Buy from Neutral based on the favorable FDA panel outcome and set a $30-$33 target range on the stock. Baird upgraded Acorda to Outperform from Neutral and raised its target to $28 from $24. Following the panel review, Baird expects Amaya to be approved in 1H10 and would be buyers into the mid/high $20s.
• Chicago Bridge & Iron (NYSE: CBI) was upgraded to Buy from Neutral at Goldman.
• PG&E (NYSE: PCG) was upgraded to Buy from Neutral at UBS.
• Newfield Exploration (NYSE: NFX) was upgraded to Outperform from Market Perform at Wells Fargo.

Analyst upgrades:

• Citigroup upgraded Nucor (NYSE: NUE) to Buy from Hold to reflect its positive outlook for steel and expectations the company will return to profitability in Q4. Citi raised its target price on shares to $57 from $46.
• Oppenheimer upgraded Given Imaging (NASDAQ: GIVN) to Outperform from Perform to reflect solid PillCam Colon data and expected margin improvement. The firm has a $25 target on shares.
• Deutsche Bank upgraded Genworth (NYSE: GNW) to Buy from Hold following the $600M capital raise as it believes liquidity at the holding company has improved. The firm raised its target on shares to $18 from $7.
• Washington Federal (NASDAQ: WFSL) was upgraded to Outperform from Underperform at FBR Capital.
• Carnival (NYSE: CCL) was upgraded to Sell from Conviction Sell at Goldman.
• Anadarko Petroleum (NYSE: APC) was upgraded to Buy from Hold at Weeden.

I'm Reiterating my Buy rating for Tesoro (NYSE: TSO), first recommended on April 23, 2009 at a price of $14.30.

Tesoro's Q2 performance disappointed, but the New York Rangers will win the National Hockey League's Stanley Cup again before I'll sell a U.S.-based refiner.

Analyst Upgrades

• Wachovia upgraded Choice Hotels (NYSE: CHH) to Outperform from Market Perform based on its high margin franchise, valuation, and brand acquisition opportunities, among other reasons.
• Canaccord upgraded Freeport McMoRan (NYSE: FCX) to Buy from Speculative Buy based on asset and management quality, size, and liquidity, and view as a potential hedge against inflation and U.S. dollar weakness.
• Cowen upgraded Amazon.com (NASDAQ: AMZN) to Outperform from Neutral. The firm expects Amazon to gain more of the consumer wallet as it focuses on lower prices and a superior shopping experience vs. online and offline competitors.
• Ctrip.com (NASDAQ: CTRP) was upgraded to Buy from Neutral at Nomura.
• FedEx (NYSE: FDX) was upgraded to Overweight from Equal Weight at Barclays.
• Marathon Oil (NYSE: MRO) was upgraded to Neutral from Sell at Goldman.

This oil refiner is up 25% so far in 2009, but it is still way below the almost $30 per share it traded at a year ago. Now, just under $17, Tesoro (NYSE: TSO) trades for eight times forward earnings.

Given that oil prices are on the upswing, look for TSO to sell refined product at higher prices at the pump. Buy low; sell high. It is that simple for TSO.

As long as we avoid the massive swings in crude prices, this little oil refiner can expect to see its stock double in value over the next year or two.

I rate TSO a B or buy.

Up next: Oil Stock #2.

With oil prices heading to $70 or more, owning oil stocks is a must for any investor looking to generate maximum returns.

Crude traders are betting that a stronger economy will result in increased demand for oil. At the same time, OPEC is holding firm on production cuts that reduces supply.

And let's not forget about the summer driving season which officially kicks off this Memorial Day weekend.

All of these factors mean investors can confidently operate under the assumption that oil prices will go up in the foreseeable future.

A new U.S. administration's promise to create a more self-reliant, energy-independent nation and the impact of efforts to first limit, then eliminate global warming from fossil fuels opens the door to alternative energy source development.

But, as Saudi Arabia reminds us, barring a breakthrough technology, fossil fuels will remain a major energy source for at least the next thirty to fifty years. In other words, oil is down now, but it's not out and it isn't going away anytime soon, which is why investors who can tolerate moderate risk should consider Tesoro (NYSE: TSO).

Analyst upgrades:

• Jefferies upgraded HMS Holdings (NASDAQ: HMSY) to Buy from Hold on valuation as they believe the recent weakness provides an attractive entry point. The firm keeps a $36 price target on shares.
  
• Credit Suisse believes Universal Health (NYSE: UHS) is well positioned to gain market share, that earnings risk from the Las Vegas market is manageable, and that the balance sheet provides flexibility. The firm upgraded shares to Outperform from Neutral and raised their target to $48 from $46.
  
• UBS upgraded RF Micro (NASDAQ: RFMD) to Buy from Neutral citing checks that indicate strengthening momentum, impact from recent restructuring, and expected debt reduction. The analyst raised RFMD estimates above consensus and upped the price target to $3 from $1.10.
• Liberty Capital (NASDAQ: LCAPA) was upgraded to Buy from Hold at Deutsche Bank.
  
• Tesoro (NYSE: TSO) was raised to Hold from Sell at Soleil.
  
• SunTrust (NYSE: STI) was lifted at Keefe Bruyette to Outperform from Market Perform.

Oil prices have dropped like a rock, and Americans are driving more as a result. So much for $4 gasoline changing the world. The green wave has run into a brick wall of lower crude prices.

In 2008, oil refiners like Tesoro Corp. (NYSE: TSO) had trouble making money due to intense volatility of prices. This year, it's a different story. Refiners make money by buying crude, processing and then selling gasoline and other by-products.

Despite the recent rally, this has been the most difficult period for investors since the Great Depression, and many trying to time a bottom in this market have been burned.

And the reality is that we are still not out of the woods. So is it time to give up?

Not at all!

There are companies operating in this environment that are actually growing their business despite the recession. And these stocks should hold their own in this bear market, even if we retest the recent lows.

While other earnings may have disappointed last week, the news was good for oil giant ConocoPhilips (NYSE: COP). In what some took as a good sign for big oil, the Houston-based company reported that third quarter net income surged 41% year over year to $3.39 per share, and that revenue also surged 52% to $70 billion. We'll see whether the good news extends to other petroleum giants scheduled to report quarterly results this week.

Analysts surveyed by Thomson Financial are looking for BP (NYSE: BP) profits to have grown 43.2% in the most recent quarter to $2.34 per share on revenue of $109.7 billion, and Chevron Corp. (NYSE: CVX) to post earnings up 39.4% to $3.25 per share on revenue of $86.8 billion. Marathon Oil Corp. (NYSE: MRO), ExxonMobil Corp. (NYSE: XOM), and Royal Dutch Shell (NYSE: RDS.A) likewise are expected to report higher net income of $2.33 per share (sales of $23.4 billion), $2.40 per share (sales of $131.4 billion), and $2.65 per share, respectively. Even Valero Energy Corp. (NYSE: VLO) is expected to post earnings slightly higher to $1.46 per share (sales of $36.4 billion), despite the effects of Hurricane Ike. Among these companies, only BP and Valero beat earnings expectations in the previous quarter. Not surprisingly, analysts on average recommend buying all except Valero, and shares of all of these companies have recently hit 52-week lows.

MOST NOTEWORTHY: The Refining Sector, International Game Tech and Gilead Sciences were today's noteworthy downgrades:

• Bernstein downgraded the Refining Sector to Market Weight from Overweight based on the weakening earnings outlook for the group. The firm downgraded Sunoco (NYSE: SUN) and Tesoro (NYSE: TSO) to Market Perform from Outperform.
  
• Citigroup downgraded shares of International Game Tech (NYSE: IGT) to Hold from Buy following the company's lower than expected guidance and removed the stock from their Top Picks Live List. The firm lowered their target to $25 from $45. Shares were also downgraded at Oppenheimer to Perform from Outperform following the company's lower-than-expected results.
  
• Jefferies cut Gilead Sciences (NASDAQ: GILD) to Hold from Buy following the company's Q2 results as they see limited upside catalysts and a matured core HIV drug franchise. The firm maintains a $56 target. BMO Capital downgraded GILD to Market Perform from Outperform based on valuation, flattening HIV sales, Letairis growth below expectations, and increased R&D costs.

OTHER DOWNGRADES:

• Best Buy (NYSE: BBY) was downgraded at RBC Capital to Outperform from Top Pick.
  
• Goldman removed Coca-Cola (NYSE: KO) from the Conviction Buy List.
  
• Progressive (NYSE: PGR) was lowered to Neutral from Outperform at Credit Suisse.

Tesoro Corp. (NYSE: TSO), a petroleum refiner, is recently up 94 cents to $17.04. Crude oil futures are recently down 3.45% to $133.96 according to Bloomberg.

TSO call option volume of 15,013 contracts compares to put volume of 4,461 contracts. TSO August option implied volatility of 96 is above its 26-week average of 62 according to Track Data, suggesting larger price fluctuations.

Option Update is provided by Stock Specialist Paul Foster of theflyonthewall.com.

Minyanville's Sean Udall dares to share the kind of keen insight and actionable information you won't find in any prospectus. Here he discusses some players in the tech sector. For more original thought, visit www.minyanville.com.

SuccessFactors (NASDAQ: SFSF): The stock prices secondary at $11.80 and is holding pretty tough. I'm watching this one pretty closely and was hoping for some post-secondary weakness to possibly add a starter here. A pretty good balance sheet just got better, but I guess the question is, "What is it going to do with that cash?"

Digital TV Holding (NYSE: STV): This company may have made a bottom recently and the deal announced today is exactly what the company talked about in its last quarterly call. I've commented on the possibility of it securing more revenue streams (partnering for recurring advertising revenue) in the past. It looks to be developing the conduits to deliver on that.

comScore (NASDAQ: SCOR): Google (NASDAQ: GOOG) news is hurting the stock badly. I sold my mine some time back after that series of paid click reports ahead of Google's last quarter that proved to be quite inaccurate. All that aside, I don't think comScore's core business is going to disappear within a compressed time frame and may be worth a long side trade if it moves near or under $20. I'll leave it be and see what develops, as the knife could cut further.

MOST NOTEWORTHY: Tesoro, Yingli Green Energy and Ensco were today's noteworthy upgrades:

• Deutsche Bank upgraded shares of Tesoro (NYSE: TSO) to Hold from Sell as they believe bankruptcy is not a "major danger" after meeting with management and that recent raise in indebtedness was due to rising working capital requirements combined with negative gasoline cracks.
  
• Citigroup raised Yingli Green Energy (NYSE: YGE) to Buy from Hold following the recent weakness to reflect the company's margin improvement and better visibility into 2009.
  
• Calyon upgraded shares of Ensco (NYSE: ESV) to Add from Neutral as they believe the company's increasing exposure to the deepwater market will drive earnings growth. The firm raised their target to $85 from $74.

OTHER UPGRADES:

• Petrohawk Energy (NYSE: HK) was upgraded at Lehman to Overweight from Equal Weight.
  
• Keefe Bruyette raised Sovereign Bancorp (NYSE: SOV) to Outperform from Market Perform.
  
• Tractor Supply Co (NASDAQ: TSCO) was raised to Buy from Neutral at UBS.