Autodesk (ADSK) shares are trading higher this morning after UBS analyst Heather Bellini upped her rating on the design software company to Neutral from Sell, increasing her price target to $16 from $8.

Bellini said the company analyst meeting on Thursday could prove to be a catalyst for the stock. “We expect management to highlight that while sales have yet to stabilize they are declining at a decelerating rate,” she writes, adding that the April quarter sales guidance of $400 million to $440 million looks “reasonable that as the slope of the decline in demand becomes less steep, management’s predictive value is higher.” She says that without an upcoming revenue miss, there’s not much reason for the stock to trader lower.

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The bears on Palm (PALM) continue to cave after a furious rally in the stock following the company’s announcement of its “new newness,” the Palm Web OS and the Palm Pre handset.

Yesterday, the stock was upgraded by former Palm bears at Citigroup and Deutsche Bank. This morning, UBS analyst Maynard Um made a similar move, raising his rating to Neutral from Sell, and upping his price target to $6.50 from $1.35. “The Palm Pre generated significant buzz at CES, surprised us to the upside and breathed new life into Palm’s stagnant portfolio,” he wrote in a research note. “Though the company still has challenges ahead, it’s clear the winds now appear to have shifted in its favor.”

Um raised his EPS estimate for the May 2010 fiscal year to positive 48 cents from a loss of 52 cents. His revenue forecast for the year jumps to $1.68 billion, from $1 billion.

Um also set a short-term Buy rating on the stock ahead of the 3GSM World Congress in Barcelona in February; he thinks the company will announced a 3G version of the phone, as well as potentially a carrier.

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If you think we are going to get out of this mess in a hurry, think again.

UBS analyst Matthieu Coppet today cut his expectations for advertising spending for this year, next year and 2010. He now sees overall spend up 3.7 percent this year, down 3.9 percent next year, and then up three percent in 2010. His old forecast: up 4.1 percent, then down 0.7 percent, then up 4.8 percent.

Particularly sobering is his forecast for the U.S., where he sees an 8.7 percent drop in spending next year, including an 11 percent decline in “traditional media”–print, broadcast and outdoor. That would be the worst year for those categories in 60 years.

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Activision Blizzard (ATVI) shares are sliding following this weekend’s debut of Guitar Hero World Tour, the latest version of the company’s popular music game. UBS analyst Benjamin Schachter says his assessment of the first day of sales was mixed: near sellout sales of Wii and Xbox 360 versions of the game at many locations, with PS3 kids often in stock. He said the guitar-only and game-only versions of the games were shipped in larger quantities but did not seem to be selling as well as the full version of the game. He also says that a small minority of buyers is reporting issues with the drum kit that comes with the game.

On a broader subject, Schachter says the videogame industry is likely to be recession-resistant, but not necessarily recession-proof.

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Citing concerns about the softening macro economy and ongoing market volatility, UBS software analyst Heather Bellini cautioned this morning that estimates for the sector “need to come down materially” for the second half and for 2009. She also asks whether software companies that typically provide guidance for the year ahead will continue the practice given the lack of visibility, and she cautions that foreign exchange–which has been a tailwind for the stocks for the last eight quarters–will provide a headwind in the fourth quarter and into next year.

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Sunshine is free. Solar modules are not. But they are getting cheaper: UBS analyst Stephen Chin today revised his forecast for solar module pricing to down 20 percent from a previous estimate of down 14 percent. Chin says the recent move by the government in Spain to cap its solar subsidy program will move solar module volumes to other markets, including Germany and Japan, where lower pricing is required to generate favorable returns for solar system buyers. The revised Spanish solar subsidy program will cut installations in Spain to 300MW next year, from an estimated 1.2GW this year.

Chin today cut EPS estimates by about 10 percent for 13 global solar companies, including SunPower (SPWR), Evergreen Solar (ESLR), LDK (LDK), Suntech (STP), Yingli (YGE), Q-Cells, Solarworld, REC, Conergy, Solon, Motech, E-Ton and Sino-American Silicon. He also cut his rating on SunPower to Neutral from Buy, while increasing his rating on Energy Conversion Devices (ENER) to Buy from Neutral.

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UBS analyst Maynard Um today launched coverage of the PC sector, setting a Buy rating on Apple (AAPL) and Neutral ratings on Dell (DELL) and Hewlett-Packard (HPQ).

Um takes over coverage of the stocks from Ben Reitzes, who now covers the sector for Lehman. Um sees 2008 PC global units growing 13 percent, propelled by strong notebook growth and strength in emerging markets. That said, Um reports that his near-term bias on the PC hardware market is “neutral, largely reflecting concerns regarding slowing GDP and consumer/enterprise spending.” While he sees healthy unit growth, he also says that competition, mix shift and technological advances will drive down average prices. He sees industry-wide revenue grow next year at nine percent.

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UBS chip analyst Uche Orji has turned cautious on the memory sector. He says a recent rebound in DRAM ASPs is not likely to be sustainable with slowing demand ahead and an increasing risk of some NAND capacity being flipped over to DRAM production. Orji also remains negative on the NAND flash market, “due to persistent excess supply.”

“While we continue to believe the DRAM industry should see further improvements in demand in [the second half], we also think the fragility and sustainability of the current DRAM sector recovery is once again in focus, given concerns for further global macro economic slowing and the potential for NAND capacity conversion to DRAM,” he writes.

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