Wednesday's Analysts' Upgrades and Downgrades

Change in Ratings

Coverage on Cardinal Health(CAH Quote) reinstated with a Buy rating at Goldman. View company as a high-quality and more focused franchise with strong fundamental outlook driven by opportunities for margin gains from improvements in nondrug wholesale business and restructuring effects. Expect solid earnings growth and aggressive share repurchase to drive stock. Target price at $86.

Caterpillar(CAT Quote) was upgraded to Outperform at Wachovia. Earnings growth should reaccelerate to 20% in 2008, as the North American residential market is showing signs of stabilizing.

Goldman is downgrading IBM(IBM Quote) to Neutral from Buy, based on slowed U.S. spending growth and lack of near-term catalysts. Company's Americas segment, which makes up 42% of revenue, grew only 1%. Goldman also notes that strongest business -- software -- contributed only 20% of growth organically, vs. 80% from acquired software. Maintained price target at $107. ...