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Analyst upgrades:

• Philip Morris (NYSE: PM) was upgraded to Outperform from Neutral at Credit Suisse.
• Friedman Billings upgraded shares of Principal Financial (NYSE: PFG) to Market Perform from Underperform as they believe the company's capital buffer could keep outrunning credit losses.
  
• Friedman Billings also upgraded Office Max (NYSE: OMX) to Outperform from Market Perform. The firm believes the risk of recourse to Office Max from the Timber Notes formerly backed by Lehman is low and that any litigation by noteholders will have a low level of success.
  
• Citigroup upgraded CF Industries (NYSE: CF) to Buy from Hold on valuation following the recent weakness but lowered their target to $113 from $128.
• Analog Devices (NYSE: ADI) was upgraded to Buy from Neutral at Merrill Lynch.
  
• Granite Construction (NYSE: GVA) was upgraded to Neutral from Sell at Goldman.
  

Analyst downgrades:

TheStreet.com's Jim Cramer says with gas coming down further, the coming rally could be broad and fierce.

The great hurricane fakeout leaves us with oil much lower than it began, having launched itself from $112. Now that the $110 level's been breached and natural gas has gone as low as $7.50, we can begin to put together a holiday scenario that might -- just might -- explain the incredible run in retail that's been going on.

The presumption in retail, if you use Wal-Mart (NYSE: WMT) (Cramer's Take) as retail, was that once the stimulus wore off, presumably last month, the stocks would get hammered. On Aug. 7, Wal-Mart as much as told you that, and the stock dropped to $57 from $60.90.

Ever since then, it has been creeping up. Kohl's (NYSE: KSS) (Cramer's Take) dropped a point from that warning, going from $45 to $44. It is now at $49. Macy's (NYSE: M) (Cramer's Take) went from $19.80 to $18.90 before bouncing to $20.82. Jones (NYSE: JNY) (Cramer's Take) went from $17.40 to $17.20 before roaring to $19.80. Ralph Lauren (NYSE: RL) (Cramer's Take), because of a great quarter, didn't even get hurt, rallying from $67 to $75.

Here are some highlights from this past week's earnings coverage from BloggingStocks:

• Archer Daniels Midland Co. (NYSE: ADM) said Q4 profit plunged, missing analysts' expectations.
• Berkshire Hathaway Inc. (NYSE: BRK.A) posted yet another solid quarter and topped analysts' expectations.
• Cisco Systems Inc. (NASDAQ: CSCO) reported solid results and reaffirmed its revenue guidance.
• General Mills Inc. (NYSE: GIS) performance despite rising commodities costs impressed Jim Cramer.
• Hansen Natural Corp. (NASDAQ: HANS) Q2 earnings surged on popularity of Monster energy drink.
• Humana Inc. (NYSE: HUM) beat Q2 expectations, sending shares of health insurers higher.
• LeapFrog Enterprises Inc. (NYSE: LF) narrowed its Q2 loss, sending shares up near its 52-week high.
• MGM Mirage (NYSE: MGM) Q2 profit tumbled but revenues topped analysts' expectations.
• NetSuite Inc. (NYSE: N) cut its Q2 loss and revenues surged on 400 new customers.
• Orbitz Worldwide Inc. (NYSE: OWW) narrowed its net loss while revenues inched upward.
• Polo Ralph Lauren Corp. (NYSE: RL) easily topped Q1 expectations and raised its full-year guidance.
• Pzena Investment Management Inc's (NYSE: PZN) CEO admits that its Q2 was "awful, just terrible."
• 3Com Corp. (NASDAQ: COMS) raised its Q1 profit and sales forecasts due to gains in China.
• Toyota Motor Corp. (NYSE: TM) net income fell due to the strong yen and rising materials costs.
• Warner Music Group Corp. (NYSE: WMG) reported a smaller-than-expected Q3 net loss.
• World Wrestling Entertainment Inc. (NYSE: WWE) flat year-over-year earnings fell short of estimtates.

AIG (NYSE:AIG) Cut to Market Perform at FBR, according to 24/7 Wall St. The financial website also reported VMware (NYSE:VMW) Started as Underperform at Bernstein and Polo Ralph Lauren (NYSE:RL) Raised to Outperform at Morgan Keegan.

Credit Suisse downgraded Avon (NYSE:AVP) to Neutral from Outperform, according to Brieifing.com. The news service also reports that Jefferies downgrade UTStarcom (NASDAQ:UTSI) to Underperform from Hold.

Douglas A. McIntyre

Polo Ralph Lauren (NYSE: RL - option chain) shares are trading higher today after the company posted first-quarter earnings of $95.2 million, or 93 cents per share, blowing analysts' estimates of 72 cents per share out of the water. RL also lifted its full-year earnings forecast to a range of $4.00 to $4.10 per share, from previous guidance of $3.95 to $4.05 per share, above analysts' expectations $3.98 per share. It is looking like the slowing economic situation is not hitting RL that hard, which could also be a good sign for other high-end retailers as well. If you think that the stock won't fall by too much in the coming months, then now could be a good time to look at a bullish hedged trade on RL.

RL opened this morning at $66.00. So far today the stock has hit a low of $63.90 and a high of $66.66. As of 12:45, RL is trading at $65.78, up $4.28 (6.9%). The chart for RL looks neutral and S&P gives RL a 3 STARS (out of 5) hold ranking.

For a bullish hedged play on this stock, I would consider a September bull-put credit spread below the $55 range. A bull-put credit spread is an options position that combines the purchase and sale of put options to hedge risk in case the stock doesn't do what you think but still leverage nice returns. For this particular trade, we will make a 7.5% return in just seven weeks months as long as RL is above $55 at September expiration. Ralph Lauren would have to fall by more than 16% before we would start to lose money. Learn more about this type of trade here.

Since January 2001, the dollar has lost much of its value. It's fallen 71% in value from the 92 cents to the Euro at which it traded back then. This is great news for Europeans who have a chance to come to the U.S.

I am teaching a group of students from Italy this month. Their friends advised them to come to the U.S. with empty suitcases so they could fill them up with clothing and other retail goods. That's because when they come here, the clothing that they buy in Europe looks to be on a 50% off sale. This leads to what may be an investment opportunity for Americans -- Polo Ralph Lauren (NYSE: RL). (Its stock is not overpriced; it's lost 39% of its value in the last year and it trades at a price earnings-to-growth (PEG) ratio of 1.2 -- a P/E of 15.7 and earnings forecast to grow 12.8% to $4.51 in 2009.)

How so? The Italian students are eager to gobble up as much of its merchandise as they can. If these students are a microcosm of Europeans, we can expect them to flock to the East Coast of the U.S. during their summer break to boost their wardrobes. They also like Lacoste and Gucci as well -- both of whose products are selling at screaming discounts here for those who get paid in Euros.

Polo Ralph Lauren Corporation (NYSE: RL) is engaged in the design, marketing, and distribution of apparel, accessories, home furnishings and fragrances. These are offered under such brand names as Polo Ralph Lauren, Safari, Black Label, Club Monaco and Rugby. The company operates over 300 Ralph Lauren, Club Monaco, and Rugby retail stores, as well as a pair of e-commerce sites. Its products are also carried by upscale and mid-tier department stores. Macy's (NYSE: M) and Dillard's (NYSE: DDS) account for more than a third of all wholesale revenue. Jones Apparel Group (NYSE: JNY) and Liz Claiborne (NYSE: LIZ) are competitors.

The company pleased investors late last month, when it reported fiscal Q4 EPS of $1.00 and revenues of $1.24 billion. Analysts had been looking for 65 cents and $1.15 billion. Management also guided FY09 EPS to $3.95-$4.05 ($3.97 consensus). Needham subsequently reiterated its "buy" rating on the shares and boosted its price target to $79.

We saw another late day move save the markets today from looking like just one more mixed post-holiday trading session. The highly volatile durable goods orders came in at -0.5% for April, based partly on severe declines in aircrafts and autos. Any reprieve in oil was just that, some reprieve but no cure. We also saw the 10-Year Treasury cross back above that 4.00% threshold again. FOMC governor Mishkin also announced that he would retire in August, although this was non-moving for the market. Below are the unofficial closing bell levels:

• DJIA 12,594.84 (+46.49)
• S&P500 1391.01 (+5.66)
• NASDAQ 2486.70 (+5.46)
• 52-WEEK LOWS
• TOP 10 ANALYST CALLS

Akeena Solar Inc. (NASDAQ: AKNS) saw a monster volume spike early on after boutique research firm Kaufman Bros. initiated coverage on the speculative solar stock with a Buy rating. More interesting than the research call itself was the overall level of volume right at the open that saw follow-on interest throughout the day as shares were up nearly 16% at $6.83 in the final minutes today.

American Eagle Outfitters (NYSE: AEO) saw a 9% rise by the final minutes of the trading day to $18.79 after its earnings came in above some expectations.

JCPenney (NYSE: JCP) shares are trading higher after Polo Ralph Lauren (NYSE: RL) announced that its fourth-quarter profit jumped 41% to $1 a share, well above analysts' estimates of 65 cents per share. RL's results were helped by the launch of the American Living line at JCP, which shows that shoppers are still buying at department stores. Also, other positive retail results from stocks like Dollar Tree (NASDAQ: DLTR) are also lending a hand. If you think that the stock won't fall by too much in the coming months, then now could be a good time to look at a bullish hedged trade on JCP.

After hitting a one-year high of $82.49 in June, the stock hit a one-year low of $33.27 in January. JCP opened this morning at $41.16. So far today the stock has hit a low of $40.68 and a high of $42.18. As of 1:00, JCP is trading at $40.91, up $0.41 (1.0%). The chart for JCP looks bullish but deteriorating, while S&P gives the stock a positive 4 STARS (out of 5) buy rating.

For a bullish hedged play on this stock, I would consider an August bull-put credit spread below the $30 range. A bull-put credit spread is an options position that combines the purchase and sale of put options to hedge risk in case the stock doesn't do what you think but still leverage nice returns. For this particular trade, we will make a 5.3% return in just three months as long as JCP is above $30 at August expiration. JCP would have to fall by more than 27% before we would start to lose money.

JCP hasn't been below $33 at all in the past year and has shown support around $38 recently. This trade could be risky if the company's earnings (due out in mid August) disappoint, but even if that happens, this position could be protected by the support the stock might find around $28, where it bottomed out in March and April.

Brent Archer is an options analyst and writer at Investors Observer. At publication time, Brent neither owns nor controls positions in JCP, RL, or DLTR.

Father's Day is around the corner. Why not spend some time looking at the coming earnings and how Dad's Day may have an impact. It is funny to see how many of the companies reporting earnings this week actually have links to Father's Day.

While this column has been obviously bearish of late, there are a few potential winners that may appear, just in time for the big day. Time to stock up on gifts for dear-ole-dad, or get farther away from stocks? You tell me... (by the way, comments and ideas are always appreciated)

Monday, May 26

Markets will be flat. I am certain that stocks on the U.S. Market will close at the exact price they closed last Friday. But what do I know!

While the earnings season is beginning to wind down for the current quarter, there are still plenty of results to come. Here's a peek at what analysts surveyed by Thomson Financial are expecting from companies scheduled to report results in the final week of May 2008.

These companies are expected to post earnings growth, compared to the same period in the previous year:

• Omnivison Technologies (NASDAQ: OVTI) up 81.3% to 32 cents per share, on $178.20 million in revenue
• Lions Gate Entertainment (NYSE: LGF) up 48.6% to 37 cents per share, on $410.93 million in revenue
• Big Lots Inc. (NYSE: BIG) up 27.7% to 36 cents per share, on $1.14 billion in revenue
• Costco Wholesale Corp. (NASDAQ: COST) up 13.8% to 65 cents per share, on $16.32 billion in revenue
• Tiffany & Co. (NYSE: TIF) up 10.0% to 40 cents per share, on $648.87 million in revenue
• HJ Heinz Co. (NYSE: HNZ) up 9.8% to 61 cents per share, on $2.67 billion in revenue
• Dollar Tree Inc. (NASDAQ: DLTR) up 9.5% to 42 cents per share, on $1.05 billion in revenue

These companies are expected to report earnings declines:

• Sears Holdings Corp. (NASDAQ: SHLD) down 86.4% to 15 cents per share, on $11.41 billion in revenue
• Men's Wearhouse Inc. (NYSE: MW) down 70.6% to 22 cents per share, on $476.98 million in revenue
• Polo Ralph Lauren Corp. (NYSE: RL) down 4.4% to 65 cents per share, on $1.15 billion in revenue
• Dell Inc. (NASDAQ: DELL) down 2.9% to 33 cents per share, on $15.66 billion in revenue

TiVo Inc. (NASDAQ: TIVO) is expected to swing to a loss of a penny per share, compared to a penny profit a year ago, and report $55.62 million in revenue. And analysts expect Borders Group Inc. (NYSE: BGP) to narrow its loss 7.8% to 47 cents per share, on $801.11 million in revenue.

Visit AOL Money & Finance for more earnings coverage.

Monday, May 26

• Markets closed for Memorial Day holiday.

Tuesday, May 27

• Vodafone Group Plc (ADR) (NYSE: VOD) to report preliminary earnings results for the year ending 3/13/08, conference call at 5:00am.
• Modine Manufacturing Co. (NYSE: MOD) to report Q4 earnings; conference call at 11:00am.

Wednesday, May 28

• Polo Ralph Lauren Corporation (NYSE: RL) to report Q4 earnings; conference call at 9:00am.
• TiVo Inc. (NASDAQ: TIVO) to report Q1 earnings; conference call at 5:00pm.

Before the bell: Stocks lower after Alcoa, AMD, ahead of housing data

Nike (NYSE: NKE) unveiled its Olympics 2008 line Monday, its largest effort for the games ever. Nike actually created products in every sport at the games despite not being an official sponsor of the games like its rival Adidas. As for the U.S. team, it will be attired in Polo Ralph Lauren (NYSE: RL) garb.

If Apple Inc. (NASDAQ: AAPL) was upgraded Monday, today it finds itself on the flip side with a downgrade from Morgan Keegan from Market Perform to Underperform. Ummmm, contrarian is one thing, but I'm not so sure about that one. AAPL shares are down nearly 1.5% in premarket trading.

Meanwhile, according to MarketWatch, Goldman Sachs has upgraded some brokers and asset managers, but is remaining cautious on regional banks, mortgage and specialty finance and REITs. American Express (NYSE: AXP), Metlife (NYSE: MET), Bank of New York Mellon (NYSE: BK), NYSE Euronext (NYSE: NYX) and several others all were upgraded to Buy. Wells Fargo (NYSE: WFC) and several others were cut to neutral.

Determined to bring a more formal, stylish fashion to the U.S. Olympic team garb for the Beijing games later this year, the Olympic committee has dumped Roots Ltd. in favor of Polo Ralph Lauren Corp. (NYSE: RL). According to The Wall Street Journal [subscription], Tom Brokaw, former NBC news anchor, was asked by USOC COO Norman Bellingham to approach Ralph Lauren about the possible affiliation.

The deal, which also includes the Paralympics, builds on the company's growing affiliation with sports events, including the U.S. Open and Winbledon, and should result in a terrific boost to sales at both its own boutiques and other retailers with whom it is negotiating distribution.

The designs will supposedly evoke the styles of the film Chariots of Fire. The duds will be kept under wraps until the opening ceremonies in August, although the many Chinese who will probably sew the garments will have a good idea of what to expect. I'll be interested to see if the Chinese government's clampdown on counterfeit goods successfully keeps fake U.S. uniforms off of the streets of Beijing before the games even began.

The line of consumer clothing to be spun off the Olympic garb should dovetail nicely into Lauren's line and burnish its image, although it will be interesting to see at what price point this line will fall. The equalitarian nature of the Olympic sport may not be reflected in the cost of dressing like our champions.

This post is one of several on business heirs apparent. Let us know in the comments whether you think David Lauren should take up the reigns of Polo Ralph Lauren, and be sure to check out the other heir apparent posts.

David Lauren is unusual among his two siblings and father, Ralph: he is not an entrepreneur. Ralph Lauren is, after all, the very definition of a self-made man, having brought himself up from his humble beginnings as Ralph Lipshitz (it was his brother who suggested the name change) and forged a company worth several billion dollars today. But as the only Lauren sibling to work for Polo Ralph Lauren (NYSE: RL) -- as the SVP of Advertising, Marketing, and Corporate Communications -- he has been called the "heir apparent" to his father by more than one fashionable pundit.

As a junior investment banker, I analyzed Ralph Lauren's balance sheet more than once, seeking to show how well it might fit with another fashion house. The numbers were convincing, and it's probable that many a quiet chat was held between high-powered apparel executives based on these balance sheet combinations. The fact that nothing has ever materialized from this Wall Street cajolery is testament to the thing we all talked about but never appeared on our PowerPoint pitch slides: Ralph Lauren likes control. (I remember a story about a major photo shoot held up for hours because Ralph didn't approve of the shade of beige used in some thread, or something similarly outrageous.)

Many a sensible succession has been held up because the aging founder was unwilling to give up the corner office, in corporations and in kingdoms alike. For all his patrician good looks and endless charms, Ralph is rather unyielding in his patriarchy and certainly has not made David's path to the CEO spot a hop, skip and a jump.