Stock Upgrades, Downgrades From TheStreet.com Ratings

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.

Gift retailer 1-800-Flowers.com(FLWS Quote) has been downgraded to hold. The company has an impressive record of growth in revenue and earnings per share. The performance of its stock has been solid. However, cash flow from its operations has been weak overall. 1-800-Flowers posted a narrower first-quarter loss of $5.8 million, or 9 cents a share, compared with $7.4 million, or 11 cents a share, a year ago. Revenue increased 6% to $145.8 million. The company has demonstrated a pattern of improving EPS growth over the past two years and this trend should continue. Net operating cash flow has declined 2.75% from the year ago. 1-800-Flowers had been rated buy since August.

IHOP(IHOP Quote), which operates a family restaurant chain, has been downgraded to hold. Although the company enjoys revenue growth, reasonable valuation levels and a solid stock price performance, it has also been marked by deteriorating net income, generally poor debt management and disappointing return on equity. The company recently reported a third-quarter loss of $11.6 million, or 69 cents a share, compared with earnings of $11.3 million, or 62 cents a share, a year ago. The results include expenses related to the company's acquisition of Applebee's(APPB Quote). Revenue increased 4% to $91.4 million. IHOP had been rated buy since October 2005.