Analysts' Upgrades, Downgrades: AIG

Change in Ratings

American International Group (AIG Quote) downgraded at Merrill from Buy to Neutral. $12.50 price target. Company will face higher losses and try to obtain dilutive financing. AIG downgraded at Citigroup from Buy to Hold. $14 price target. Company will have its worst quarter yet in the wake of Lehman (LEH Quote), though it should still survive.

Amylin (AMLN Quote) upgraded at Natixis Bleichroder from Sell to Hold. $22 price target. Byetta monotherapy FDA ruling at the end of the month could go either way, and the risk/reward looks even at current levels.

Goldman Sachs (GS Quote) downgraded at Merrill from Buy to Neutral. $159 price target. Estimates also cut, to reflect a higher cost of capital and continued deleveraging.

JP Morgan Chase (JPM Quote) downgraded at Merrill to Underperform. $33 price target. Estimates also cut, to reflect expected mark-to-market losses.

Louisiana-Pacific (LPX Quote) downgraded at RBC from Sector Perform to Underperform. $8.50 price target. Prices should fall at the end of the buidling season, and the stock has already rebounded 40% from its recent lows.

National Instruments (NATI Quote) upgraded at Weisel from Underweight to Market-weight. $35 price target. Company has the strongest secular organic growth potential in the industry, though numbers could decelerate because of the increasing scale.

Strategy Calls/Market Calls

Lowe's (LOW Quote) and Home Depot (HD Quote) downgraded at Credit Suisse to Neutral from Outperform based on valuation and further weakness in the housing sector. Maintained target prices: $29 for Home Depot and $26 for Lowe's.

Two Homebuilders downgraded at Citigroup. Pulte (PHM Quote) downgraded from Buy to Hold. Valuation call, as the stock is up 32% since Aug. 12. The rating on D.R. Horton (DHI Quote) was cut from Hold to Sell, also based on valuation.