Stock Upgrades, Downgrades From TheStreet.com Ratings

Southwest Airlines(LUV Quote) has been downgraded to hold from buy. The company's net income grew 237.5% to $162 million in the third quarter compared with the same period last year, and its revenue increased by 10.6% over the same time frame. Southwest's EPS improved to 22 cents a share in the third quarter compared with 6 cents a share in the same period last year.

Stable earnings over the past year indicate that the company has sound management over its earnings and share float. However, its gross profit margin of 30.10% in the third quarter has decreased from the same quarter last year, and its stock price has gone down by 13.40% in the 12 months prior to Nov. 8. Looking ahead, TheStreet.com Ratings does not see anything in the company's numbers that suggest this downward trend will change in the next year. Southwest had been rated a buy since July 2007.

Talisman Energy(TLM Quote) develops, transports and markets crude oil and natural gas. It has been upgraded to buy from hold. The company's revenue grew by 8.4% in the third quarter compared with the same period last year, outpacing the industry average of 4.9%. Talisman also demonstrates good cash flow from operations and expanding profit margins.

Its stock price went up by 27.69% in the 12 months prior to Nov. 8, driving it to a price level that is somewhat expensive compared with the rest of its industry. However, the other strengths the company shows justify the higher price level. Talisman had been rated a hold since August 2007.