Shares of online brokers Ameritrade (AMTD) - Get Report and E*Trade (EGRP) rallied Wednesday as sell-side analysts took to the airwaves.

But what's changed since yesterday, last month or last spring, when these stocks were dogs with fleas? Nothing when it comes to the fundamentals. E*Trade is still the fast-growing online broker that's trying to diversify, and it's still losing money thanks to big marketing costs. Ameritrade still holds its niche as the pure online broker with little interest in diversification, and it's also losing money thanks to advertising expenses. In addition, trading volumes remain weak.

But hey, why bother with all that. Most investors weren't Wednesday. E*Trade climbed as high as $20.19, thought it finished up only 31 cents, or 1.7%, to $18.38. Ameritrade was up $2.19, or 12%, to $20.81.

Investors were taking heart in

Credit Suisse First Boston

analyst James Marks' upgrades on the stocks, to buy from hold. (CSFB hasn't done any underwriting for E*Trade but did underwrite Ameritrade's IPO.) If that weren't enough,

CIBC World Markets

boosted Ameritrade to a buy from a hold, and

UBS Warburg

started coverage of E*Trade with a buy. (Neither firm has done underwriting for the companies.)

Marks hasn't had a buy on Ameritrade in almost two years or on E*Trade in almost a year. It's not that Marks doesn't recognize that the story is the same. He does. But, he says, when it comes to the online brokers, it's all about timing buying and selling around valuations and the stock market, which has a strong effect on how these companies perform.

"The same sort of broad thesis that we've looked at forever is still in effect," Marks says. "The only problem with the companies is that they are clearly vulnerable to whatever happens in this market. The net effect is you have to be disciplined in where you buy and sell."

And now is the time to buy, he says, because the stock market is creeping up and the brokers have low valuations on their side. The stocks are trading at a fraction of their peak levels, making them more attractive based on customer account growth and the relatively low cost of acquiring each account -- $2,600 at Ameritrade and $1,888 at E*Trade.

He put a $35 price target on both stocks.

But in another sign that plenty of questions remain about the online brokers' prospects,

UBS Warburg

started coverage of the group with a less-than-enthusiastic review Wednesday. In rating E*Trade a buy, analyst Diane Glossman set its price target at just $21. Glossman rated Ameritrade a hold and set her price target at $20.

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Her only other buy was reserved for

TD Waterhouse


, which she gave a $23-a-share price target. It closed at $20.75 a share. She bestowed hold ratings on the rest of the bunch --




National Discount Brokers Group


. (UBS Warburg hasn't done any underwriting for any of the firms.)

Of course, one thing could easily override all these concerns -- consolidation. With big deals going on left and right -- CSFB agreed to buy

Donaldson Lufkin & Jenrette


and its DLJdirect unit last week, for instance -- investors clearly have hopes pinned to an eventual deal involving one of the online brokers.

Most of the speculation has centered on Ameritrade. Talk has surrounded it since Tom Lewis stepped down as CEO unexpectedly on Aug. 7, putting the company's future path back into owner-founder Joe Ricketts' hands. (

looked at this issue recently.) The stock has since gained 60%.