Analysts' Upgrades, Downgrades: BofA

CHANGE IN RATINGS

Diageo (DEO Quote) upgraded to a Buy at BofA/ML with a price target of $58, which implies a fwd. PE multiple of 12.8x and 7.2% FCF yield. Despite tough industry news Diageo's share price appears to have found a floor. On an absolute basis price target and 4% DY implies attractive total return. On a relative basis, ML believes that Diageo is likely to underperform if the market rallies.

Guess (GES Quote) coverage started as new Equal-weight at Barclays Capital. $25 price target. Company has little visibility, despite its long-term growth potential.

Jacobs Engineering (JEC Quote) downgraded at UBS from Buy to Neutral. $47 price target. Lower capital spending in end market will make growth challenging. Stock is also up 65% from the bottom, while consensus estimates look to high.

Lincoln National (LNC Quote) upgraded at Merrill Lynch/Bank of America from Underperform to Buy. $17 price target. Company should qualify for and accept TARP funding, which will reduce downside risk.

Shaw Group (SGR Quote) upgraded at JPMorgan is upgrading SGR to Overweight from Neutral based on improved visibility into nuclear projects and scrubber work. See potential for additional builds in both the U.S. and internationally as sentiment toward nuclear power improves and emissions standards increase. Price target raised to $34 from $31.

Stryker (SYK Quote) upgraded at RBC from Underperform to Sector Perform. $37 price target. Stock is already pricing in lower spending on hip/knee replacements.

STOCK COMMENTS / EPS CHANGES

Bank of America (BAC Quote) estimates increased at Morgan Stanley through 2011. Company realizing higher investment banking and mortgage income. Underweight rating and $16 price target.