Tuesday's Analysts' Upgrades, Downgrades

Change in Ratings

Apple(AAPL Quote) downgraded at Morgan Keegan from market perform to underperform. Expect the company to suffer from broad consumer spending weakness, and growth to decelerate over the next two to three quarters.

American Express(AXP Quote) upgraded at Goldman Sachs to buy from neutral, based on valuation. See risks of slowing growth in consumer spending and deteriorating consumer credit trends fully priced into shares. Price target at $53.

Franklin Resources(BEN Quote) upgraded at Goldman to buy from neutral based on attractive risk/reward stemming from attractive valuation and strong fundamentals. Price target raised to $135 from $110.

Bank of New York Mellon(BK Quote) upgraded at Goldman to buy from neutral based on valuation. See Fed actions offsetting effects of weak equity markets. Note discount to other trust banks and historical average. Price target at $53.

Cinemark(CNK Quote) downgraded at JPMorgan from overweight to neutral. Estimates also cut, on expected weaker overall box office results in the second and third quarter.

Discover Financial(DFS Quote) upgraded at Goldman Sachs to neutral from sell following announcement of Diners Club acquisition. See increased high-multiple network earnings and expansion into markets outside U.S. with better outlook for consumer spending. Target raised to $17 from $14.

Energy Transfer(ETP Quote) upgraded at UBS to buy rating from neutral. Price target holds at $54 while fiscal year 2008 EPS estimates upped to $3.68 from $3.44.

Federated Investors(FII Quote) downgraded at Goldman Sachs to neutral from buy based on less defensive stance on asset managers. Also see increased fee competition for money market funds and concerns over SIV exposure as potential negatives. Target lowered to $43 from $45.

Flowserve(FLS Quote) downgraded at Baird to neutral with a $120 price target. Valuation call. Continue to expect strong first-quarter results.

Janus Capital(JNS Quote) upgraded at Goldman Sachs to buy from neutral. Note stock's underperformance year to date alongside improved performance in funds. Note highest average fund rank among peers, according to Morningstar. Price target at $32.

Kinetic Concepts(KCI Quote) upgraded at Wachovia to outperform. Expect fewer share losses in VAC, and the LIFC acquisition helps to diversify the revenue stream.

MetLife(MET Quote) upgraded at Goldman Sachs to buy from neutral based on valuation and benefits of steepening yield curve. See shares returning to average price/book valuation (since 2004). Price target raised to $72 from $65.

Knight Capital(NITE Quote) downgraded at Goldman to neutral from buy, based on weaker Deephaven results. See recent strong growth in Global Markets volumes slowing. Price target at $20.

NYSE Euronext(NYX Quote) upgraded at Goldman Sachs to buy from neutral based on broader view of a recovery in financial stocks. See numerous long-term catalysts for NYX, including earnings growth sparked by integration of acquisitions and joint ventures, and a focus on stabilizing market share through price actions and market structure adjustments. Price target at $87.

Och-Ziff Capital(OZM Quote) downgraded at Goldman to neutral from buy. In lieu of more aggressive view of finance names, see greater upside at other asset managers. Note recent weak fund performance and $0.5 billion in outflows during March. Price target at $23.

Wells Fargo(WFC Quote) downgraded at Goldman to neutral from buy based on more bearish forecast for home equity. With major exposure to home equity loans in weak markets including California, see bank poorly positioned for 2008. Note near-term credit risk beyond $1.4 billion reserve taken in fourth quarter. Price target at $33.

Washington Mutual(WM Quote) downgraded at KBW to underperform with a $10 price target. Expect financing to carry heavy dilution.

Stock Comments/EPS Changes

Lions Gate(LGF Quote) initiated at Jefferies with hold rating. Price target starts at $10.50 with fiscal year 2009 EPS estimates at 45 cents.