NEW YORK (AP) - A Lehman Brothers analyst upgraded shares of ethanol producers Aventine Renewable Energy Holdings Inc. and VeraSun Energy Corp. Thursday, saying flat corn prices, impending alternative energy legislation and a narrower spread between the cost of ethanol and gasoline could lift the shares as much as 50 percent in the next three months. Both stocks are trading near annual lows, with VeraSun shares down 24.8 percent since July 11, and Aventine shares off 25.3 percent. Ethanol producers have been weaker than the broader market over the last month, said analyst Mansi Singhal, who upgraded the sector to "Positive" from "Neutral," and raised his ratings on Aventine and VeraSun to "Overweight" from "Equal Weight." He has a price target of $20 per share on Aventine stock, and $17 per share on VeraSun. "We think the downside risk may be limited to only 10 to 15 percent, while the upside potential could be as high as 30 percent to 50 percent over the next three months," he wrote in a note to clients. Singhal said he thinks Congress will require greater use of ethanol before the end of next year, although differences between House and Senate versions of energy bills and White House opposition could keep that from happening in 2007. This year's large corn crop should keep prices flat or reduce them slightly, he added. While ethanol is significantly cheaper than gasoline, Singhal thinks that discount will become narrower in the months ahead. Aventine shares closed at $13.70 Wednesday, and have traded between $13.10 to $28.83 in the last year. VeraSun shares finished at $12.24 Wednesday, and have ranged from $12.11 to $26.90.