Stocks go up, stocks go down -- and so do analysts' opinions of them. This series, brought to you by Yahoo! Finance, looks at which upgrades and downgrades make sense and which ones investors should act on. And today we're going to cover a lot of ground -- beginning in the oil patch, moving into semiconductors, and finally ending in the women's apparel section. That's quite a trip, so let's get started.

Chesapeake drains the debt swamp
First up: Chesapeake Energy (NYS: CHK) . By now you're probably aware that Chesapeake has entered into contracts to sell off $4 billion worth of pipeline assets, including its stake in Chesapeake Midstream Partners (NYS: CHKM) . What you may not be aware of, though, is the extra benefit this will have on Chesapeake's balance sheet. In addition to the obvious $4 billion windfall, you see, Chesapeake no longer has to pay to maintain and improve these assets. Analyst Canaccord Genuity has a report out this morning arguing that over the next three years, these savings could amount to as much as $3 billion in capital expenditures that Chesapeake need not make.

Good news? Canaccord thinks so, and it's upping its target price on the stock to $28 in response. Investors, however, should think twice before assuming Chessie will reach that price.


Consider: Even if all proceeds from the asset sales go toward paying down debt, the company would still be $9 billion in the hole. Meanwhile, Canaccord's suggestion that Chesapeake's free-cash-flow deficit could fall from last year's $8.5 billion toward $6 billion by 2013 would certainly be an improvement. But so long as Chessie continues spending more than it brings in as operating cash flow, it's moving in the wrong direction.

Shorts: Don't mess with Texas Instruments
Another company receiving praise on Wall Street this morning is semiconductor specialist Texas Instruments (NYS: TXN) , recipient of an upgrade to "buy" from National Securities.

TI, you see, just narrowed its earnings guidance for the current quarter. National interprets this news thusly: "Even as global macroeconomic conditions have weakened recently, TI maintained the mid-point of its revenue and earnings per share guidance." In other words, the mere fact that TI didn't issue an earnings warning is good news and justifies a buy rating. But does it, really?

Sure, if TI had cut guidance, that would have been far worse news than what we got this morning. But even in current circumstances, TI looks like an 18 P/E stock with 8% long-term growth prospects. That's not exactly a bargain.

Bargain barn
What might be a bargain, though, is our third upgrade story: Ascena Retail (NAS: ASNA) , formerly known as Dress Barn.

With a 15% growth rate undergirding it, this stock doesn't look terribly expensive, even at 16.5 times earnings. Recognizing this, FBR Capital upgraded the stock to "outperform" this morning and gave it a $23 price target. Strong free cash flow (slightly ahead of reported earnings), plus a bank account plump with $610 million cash -- without a lick of debt -- all argue in favor of the stock.

Free of its dowdy old moniker, the erstwhile Dress Barn today looks just as fashionable as FBR declares it to be.

At the time this article was published Fool contributor Rich Smith holds no position in any company mentioned. The Motley Fool owns shares of Chesapeake Energy Corporation C. Motley Fool newsletter services have recommended buying shares of Chesapeake Energy Corporation C. The Motley Fool has a disclosure policy. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. Try any of our Foolish newsletter services free for 30 days.

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