TheStreet.com Ratings: Stock Upgrades, Downgrades

Each weekday, 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 forecasted company earnings. Objective elements include volatility of past operating revenue, financial strength and company cash flows.

Diversified industrial giant General Electric(GE Quote) has been upgraded to a buy from a hold. The company has demonstrated a pattern of positive earnings per share growth over the past two years, including a 10% increase in the first quarter of fiscal 2007 compared with the same quarter a year earlier. TheStreet.com Ratings expects this trend to continue. General Electric's stock has risen over the past year, but has underperformed the S&P 500, suggesting there could still be some upside left. GE had been rated a hold since March 2007.

European airline Air France-KLM(AKH Quote) has been upgraded to a hold from a sell. The company's revenues jumped 32.4% in the third quarter of fiscal 2006 compared with the same quarter a year earlier, slightly outpacing the industry average of 25.1%. This revenue growth appears to have trickled down to the bottom line, where earnings per share more than tripled during that same time period. Air France-KLM had been rated a sell since July 2006.