Terra Networks' (TRRA) intermediate-term rating was downgraded this morning to neutral from accumulate by Merrill Lynch analyst Peter Bradshaw. The downgrade comes the day after the company agreed to merge with Internet portal Lycos (LCOS) .

In his note, Bradshaw said, "

we expect the premium paid for Lycos may outweigh the synergies gained. As a result we expect a transfer of value towards Lycos and away from Terra."

Also this morning,

UBS Warburg

downgraded Lycos to hold from buy and

ABN Amro

downgraded Lycos to hold from outperform.

Upgrades

Public Service Enterprises

(PEG) - Get Report

: UP to buy from hold at

ABN Amro

; price target: 44.

Sprint PCS

(PCS)

: UP to strong buy from buy at

W.R. Hambrecht

; price target: 85.

Downgrade

AT&T

(T) - Get Report

: price target DOWN to 65 from 75 at

Salomon Smith Barney

.

Initiations

Ariba

(ARBA)

: NEW buy at UBS Warburg; price target: 90.

Commerce One

(CMRC)

: NEW buy at UBS Warburg; price target: 65.

Engage

(ENGA)

: NEW buy at

ING Barings

; price target: low 30's.

Igen International

(IGEN)

: NEW buy at UBS Warburg; price target: 30.

SpectraSite

(SITE) - Get Report

: NEW buy at

Lehman Brothers

; price target: 31.

Group Moves

Credit Suisse First Boston

raised the price targets for two retailers:

  • The Limited (LTD) : raised to 55 from 46.
  • Tiffany (TIF) - Get Report: raised to 80 from 75.