What happened?
Wells Fargo
 upgraded retail REITs Realty Income (O -0.85%) and National Retail Properties (NNN -0.80%) to "outperform" in a report released on Tuesday.

This is the latest in a series of upgrades for Realty Income. In October, Bank of America upgraded Realty Income from "neutral" to "buy" and increased its price target from $50 to $55. Stifel Nicolaus also gave the company a "buy" rating and a $52 target, increased from $50.

Does it matter?
Sort of -- to the stock's price, at least. Since the upgrade was announced, both stocks have popped by about 3%. Analyst upgrades don't change anything fundamentally with stocks, but are usually caused by fundamental or financial changes within a company. They can affect a stock's price by causing investors to change their sentiment about a company, which can fuel buying activity.

When looking at upgrades and downgrades, there are a few things to keep in mind. First of all, analyst ratings aren't standardized -- meaning that different firms use different rating systems. For example, Wells Fargo has three levels. Other firms can have four or five (or more) levels, and different terminology, such as "market perform" instead of "hold." The designation "buy" may be the highest at one analyst's firm, but many firms have a "strong buy" level above this.

The point is that the opinion of a single analyst should be taken with a grain of salt. It is usually good for a quick pop, but nothing more. If anything, an analyst-driven pop can make a stock you're considering more expensive. Regardless of what analysts have to say, it's important to conduct your own analysis to determine whether or not Realty Income and National Retail Properties fit into your personal investment objectives.