This series, brought to you by Yahoo! Finance, looks at which upgrades and downgrades make sense, and which ones investors should act on. Today, our headlines feature upgrades for office furniture maker Steelcase (SCS -1.49%) and satellite radio operator Sirius XM (SIRI -4.43%). On the downside, though...

Eni is running out of gas
Shares of Italian oil and gas producer Eni SpA (E 0.61%) are sitting out the market rally this morning, sinking as the rest of the market rises in response to a downgrade from HSBC. Yes, you read that right. One day after investment banker Raymond James raised investor hopes with an upgrade to "outperform," saying it liked the company's dividend yield and pipeline prospects, HSBC is dashing them with its assessment that the stock should be "underweighted."

Which of these two analysts should you listen to? Call me a pessimist, but I'm more inclined to side with HSBC than with Raymond James. For one thing, Eni's valuation of 13 times earnings seems a bit rich for a company that most analysts agree can only grow earnings at 3% annually over the next five years. Eni's heavy debt load (nearly $20 billion net of cash) and weak free cash flow (just $137 million last year -- a far cry from reported "GAAP" profits of $7.2 billion) offer two more reasons for concern.

When you top all this off with the fact that Eni's investment in gas fields off the coast of Ukrainian Crimea just went up in smoke thanks to Russia's annexation of the region, I'd say prospects for the stock look bleak.

Steelcase looks solid
Oil and gas plays are inherently risky ventures of course, characterized by high capital costs and sometimes low returns. But what about the more predictable business of selling office furniture? This morning, the same analyst who made the bad call on Eni, Raymond James, offered investors some much better advice on office furniture manufacturer Steelcase.

The reasons for the analyst's optimism aren't hard to discern. Just yesterday, Steelcase reported what was by all measures a very successful quarter, in which Q4 earnings of $0.18 per share beat analyst estimates by a penny. Steelcase CEO James Keane boasted that his company delivered "exemplary" results, with operating profit margins of about 11.5%, and "market share in the U.S. [rising] for the third consecutive year."

Most analysts who follow the company expect that further good news lies ahead. Best-guesses for the company's future earnings growth rate approximate 17%, which when combined with the company's strong 2.7% dividend payout are almost enough to justify the stock's pricey valuation -- 22 times free cash flow, and 23 times earnings. While the stock's clearly not as good a bargain as it was a day before the good earnings news came out, it's not egregiously overpriced. My only quibble with Raymond James' advice here? It would have been more helpful to investors had they recommended buying Steelcase a few days ago.

Time to tune in to Sirius?
So where can investors turn to try and buy an undervalued stock before it shoots up 14% in a day (as Steelcase just did)? Ace analyst Barclays Capital thinks it has an idea: Sirius XM Radio.

Once a star performer, Sirius shares have lagged the S&P 500 rather badly over the past year, gaining less than 3% against a 19% rise on the S&P -- and most of the gains Sirius did make came this morning, in response to Barclays' upgrade. But crunching the numbers on the stock, I see at least a potential for further gains at this now "overweighted" stock, and maybe even a rise to the $4 share price that Barclays predicts.

Sirius shares, you see, currently look richly valued at 54 times earnings. But looks can be deceiving. While Sirius reported "earning" only $377 million last year, the company's free cash flow for the past 12 months was a much more robust $929 million. On a market cap of less than $20 billion, that works out to only about a 21.3x FCF valuation -- not excessive if the company lives up to its 22%-plus projected growth rate.

Long story short: while not a huge bargain, Sirius shares are arguably the most attractively priced of the three stocks we've looked at today -- and are objectively, if only slightly, underpriced. Barclays is right to recommend buying the shares.