This series, brought to you by Yahoo! Finance, looks at which upgrades and downgrades make sense, and which ones investors should act on. Today, with earnings season in full swing, corporate profits have analysts jumping and shifting their stances on companies such as eBay (Nasdaq: EBAY), American Express (NYSE: AXP), and F5 Networks (Nasdaq: FFIV). Let's take a quick look at the news and see what Wall Street has to say about it.

eBay "Pays" off
eBay wowed its skeptics yesterday with a 20% gain in quarterly income and 29% better revenues -- topping it all off with improved full-year guidance of perhaps $1.96 per share in profit. What's behind the news? Well, it's garage sale season, so maybe more people are deciding to dispose of their old junk at the world's greatest online flea market. But what's really driving the results here is the wildfire success of PayPal, where revenues grew an astounding 32% in fiscal Q1.

The news sparked renewed interest in the company on Wall Street. Canaccord Genuity  boosted its price target on the stock to $41 a share, while The Benchmark Company was so impressed that it upgraded the stock to "buy," with a $45 target.

No wonder. Sure, at 16 times trailing earnings, eBay looks a mite pricey for the sub-13% long-term growth Wall Street is expecting of it. But if eBay can keep trumping those estimates with 20%, 29%, and 32% growth numbers, expect to see a lot more upgrades where this one came from.

Express train to profit
In further happy news, shareholders of American Express are grinning ear-to-ear after their company reported a $1.07-per-share profit that easily trumped Street expectations. Customer card-spending is up, while AmEx's expenditures on cardholder rewards are down 7%. Perhaps best of all, AmEx is now the card company with the single best record of customers not delinquent on their loans.

All this good news convinced banking specialist FBR Capital to up its price target by 13% -- but it wasn't quite good enough to extract a "buy" rating from FBR. Why not?

Perhaps because no matter how good AmEx does this year, its success is already more than priced into the stock. Consider: Analysts think AmEx is a good enough operation that it can keep growing profits consistently at about 10% a year. (Incidentally, that's the same rate of profits growth AmEx just reported.) Yet the stock already costs 14 times earnings, and its meager 1.4% dividend yield isn't quite enough to make up the difference. At best, the stock's the "hold" that FBR now says it is. At worst, AmEx might even be pricey enough to consider selling. It's up 23% over the past year, after all, and there's no time like the present to take profits.

F5 goes to 11!
Last but not least, fast-networking facilitator F5 booked an 11% gain in share price this morning, helped first of all by yesterday's earnings report, but even more by Wall Street's reaction to it. F5 beat earnings by a couple of pennies a share and slightly edged out consensus expectations for revenues as well. That's good news ... but not as good as Wall Street's reaction to it.

So far, both Wunderlich and Capstone Investments have upgraded F5 to "buy" and stuck $140-ish price targets on the stock, while ISI Group, already at "buy," upped its price target by a whopping 15% and now predicts that this former $125 stock will hit $150 within a year. Is that realistic?

Two things suggest that it may not be. You see, Wall Street's cheering notwithstanding, F5's "earnings beat" really wasn't all that big. A few cents in a single quarter probably doesn't ensure the $25 bump in share price that ISI is promising us -- the more so when you consider that F5 didn't bank its fiscal Q2 gain and up guidance for the full year on top of it. Management only reiterated its target for full-year growth, which suggests that whatever extra profits F5 reaped last quarter, it may pay for in weaker-than-expected earnings later this year.

This prospect doesn't bode well for a 41 P/E stock that's growing at only 20% per year. Any disappointment in the quarters to come, and this stock could fall hard.

Fool contributor Rich Smith holds no position in any company mentioned. Motley Fool newsletter services have recommended buying shares of and writing puts on eBay, as well as writing a covered strangle position in American Express. The Motley Fool has a disclosure policy. We Fools don't 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.