Websense (NASDAQ: WBSN) develops and markets web filtering and security software that helps organizations to manage usage of their computer networks. Programs monitor network access, protect confidential information from web-based attacks, monitor e-mail and instant messaging, prohibit employee access to certain content, and restrict access to employer-defined time periods. The company hosts a service that allows subscribers to upgrade their Websense software to protect against new web-based and application-based threats.

The firm pleased investors earlier in the week when it said that Q4 non-GAAP revenues were expected to exceed previous guidance of $76-$79 million. Wall Street had been looking for $77.3 million. Management also remarked that quarterly billings would top the previous estimate of $92-$95 million. In discussing the upside adjustments, the CEO particularly cited positive results from the recent acquisition of SurfControl. WBSN shares popped on the news and then moved into a bullish "flag" consolidation pattern. Prices frequently exit flags moving in the same direction they were traveling on entry. In this case, that would be to the upside.

MOST NOTEWORTHY: Websense (WBSN), OSI Pharma (OSIP), Gap (GPS), Tiffany & Co (TIF) and Callaway Golf (ELY) were today's more noteworthy upgrades:

• Jefferies upgraded Websense (NASDAQ: WBSN) to Hold from Underperform to reflect the strong recent results from SurfControl as well as the possibility for 2H software seasonality.

• Lehman upgraded shares of OSI Pharma (NASDAQ: OSIP) to Overweight from Underweight on valuation as well as expectations for price increases and growth in Europe.

• Susquehanna upgraded shares of Gap (NYSE: GPS) to Positive from Neutral citing management's ability to control costs & manage inventories, share buybacks, and streamlining of organizational structure.
  

• Tiffany & Co (NYSE: TIF) was upgrade to Accumulate from Neutral at Buckingham based on valuation and strong worldwide luxury trends outside of Japan.

• Matrix upgraded shares of Callaway Golf (NYSE: ELY) to Strong Buy from Hold to reflect positive fundamentals and the recent share weakness...

OTHER UPGRADES:

• Valueclick (NASDAQ: VCLK) was upgraded to Buy from Hold at Needham.

• WestLB raised Swisscom (NYSE: SCM) to Add from Hold and Ericsson (NASDAQ: ERIC) to Buy from Hold.

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

MOST NOTEWORTHY: Websense Inc (WBSN), Dow Jones & Co, Inc (DJ), Krispy Kreme Doughnuts (KKD), US Airways Group, Inc (LLC), Starwood Hotels & Resorts Worldwide, Inc (HOT) were today's more noteworthy downgrades:

• Jefferies downgraded Websense Inc (NASDAQ: WBSN) to Underperform from Hold with a $20 target to reflect slowing growth in the URL market, near-term business disruption from the pending SRF deal and summer software seasonality.

• Dow Jones & Co (NYSE: DJ) was cut to Hold from Buy at Gabelli and to Market Perform from Outperform at Wachovia.

• Krispy Kreme (NYSE: KKD) was downgraded to Neutral from Overweight at Prudential.

• Merrill Lynch downgraded US Airways Group (NYSE: LCC) to Neutral from Buy.

• Goldman downgraded Starwood Hotels (NYSE: HOT) to Neutral from Buy to reflect the weaker-than-expected quarterly fundamentals reported by the major hotel companies. The firm believes investors should stay away from the lodging sector...

OTHER DOWNGRADES:

• JP Morgan cut Federated Investors, Inc (NYSE: FII) to Underweight from Neutral on valuation.

• Genesco Inc (NYSE: GCO) was downgraded to Market Perform from Outperform at Piper Jaffray.

• UBS cut Liz Claiborne (NYSE: LIZ) to Neutral from Buy.

• Tibco Software Inc (NASDAQ: TIBX) was cut to Hold from Buy at Jefferies.

• Baird downgraded Watts Water Technologies, Inc (NYSE: WTS) to Underperform from Neutral.

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

MOST NOTEWORTHY: Websense Inc (WBSN) and Aflac (AFL) topped today's most notable upgrades:

• Cowen upgraded Websense Inc (NASDAQ: WBSN) to Neutral from Underperform and considers shares fairly valued.

• Suntrust Robinson Humphreys upgraded Aflac inc (NYSE: AFL) to Buy from Neutral based on an expected rebound in sales and solid earnings.

OTHER UPGRADES:

• Oppenheimer upgraded the Oil & Gas Sector to Buy from Neutral, seeing a potential upside as oil prices may have hit bottom.

• Matrix upgraded shares of Harman Int'l Industries Inc (NYSE: HAR) to Buy from Hold and expects the company to continue to benefit from growing automotive sales and the demand for professional equipment.

• JP Morgan expects strong 2007 earnings growth with upside to consensus estimates for CH Robinson Worldwide Inc (NASDAQ: CHRW), upgrading shares to Overweight from Neutral.

• Citigroup upgraded shares of Sony Corp ADR (NYSE: SNE) to Buy from Hold, with a $56 target.

• Bowater Inc (NYSE: BOW) was upgraded to Neutral from Underperform at DA Davidson.

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