Stock Upgrades, Downgrades from TheStreet.com Ratings

Each business day, TheStreet.com Ratings updates its ratings on the stocks it covers. The proprietary ratings model projects a stock's total return potential over a 12-month period, including both price appreciation and dividends. Buy, hold or sell ratings designate how the Ratings group expects these stocks to perform against a general benchmark of the equities market and interest rates.

While the ratings model is quantitative, it uses both subjective and objective elements. For instance, subjective elements include expected equities market returns, future interest rates, implied industry outlook and company earnings forecasts. Objective elements include volatility of past operating revenue, financial strength and company cash flows.

However, the rating does not incorporate all of the factors that can alter a stock's performance. For example, it doesn't always factor in recent corporate or industry events that could impact the stock price, nor does it include recent technology developments and competitive dynamics that may affect the company.

For those reasons, we believe a rating alone cannot tell the whole story, and should be part of an investor's overall research.

Vornado Realty Trust(VNO Quote) is a real estate investment trust that owns a variety of office and retail properties. It has been downgraded to a hold from a buy. Our downgrade is primarily based on the weakening outlook in the commercial REIT sector and growing concern over the Toys "R" Us results.

Vornado has a 32.7% stake in the toy retailer, which is operating in a difficult environment for traditional toys amid slumping consumer spending that appears unlikely to improve in the near future. The company recorded 21.6% revenue growth year over year in its top line during the third quarter to $915.67 million. This, partly offset by margin contraction and a higher interest expense, led to a 2.2% growth in net income to $130.84 million over the same timeframe. Vornado had been rated a buy since January 2006.

Constellation Brands(STZ Quote) produces and markets wine, spirits and imported beer. It has been downgraded to a hold from a buy. The company's third-quarter net income rose by 10.9% to $119.6 million, or 49 cents a share, from $107.8 million, or 45 cents per share, in the same period last year. Constellation also demonstrates attractive valuation levels and good cash flow from operations.

The company's debt-to-equity ratio is relatively high when compared with the industry average, suggesting the need for better debt level management. In addition, its quick ratio of 0.60 shows a lack of ability to cover short-term liquidity needs.

Constellation Brands' current return on equity has slightly decreased from the third quarter one year ago, which implies a minor weakness in the organization. Its return on equity is significantly below that of the industry average and that of the S&P 500. Constellation Brands had been rated a buy since October 2007.

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