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

Invesco(IVZ Quote) manages investments for institutional, retail and private-wealth clients. It has been downgraded to hold from buy. The company's EPS increased 40% in the second quarter over the year-earlier period, continuing a two-year pattern of EPS growth. Its revenue increased by 22.86% over the same time frame.

As a counter to these strengths, the company's return on equity has been disappointing. In the last 12 months, Invesco's stock price has risen 22.62%, outperforming the S&P 500. It is now relatively expensive compared with the rest of its industry, reducing its upside potential. Invesco had been rated a buy since August 2007.

Network computing infrastructure product and service solutions provider Sun Microsystems(JAVA Quote) has been upgraded to buy from hold. The company has shown a pattern of EPS growth over the past two years, a trend TheStreet.com Ratings believes will continue. Net income swung to a profit of $329 million in the fourth quarter of its fiscal 2007 from a loss of $301 million a year earlier.