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.
Brookfield Properties (BPO) is a publicly owned real estate investment firm. It has been downgraded to sell from hold. The company's third-quarter earnings swung to a loss of 1 cent per share compared with a gain of 9 cents a share in the same period last year. While its debt-to-equity ratio of 3.05 is very high, it is currently less than that of the industry average.
Brookfield's stock price has fallen 19.89% in the last 12 months, in part reflecting the company's sharply declining EPS when compared with the year-earlier quarter. The fact that the stock is now selling for less than others in its industry in relation to its current earnings is not reason enough to justify a buy rating at this time. Brookfield Properties had been rated a hold since TheStreet.com Ratings initiated its coverage of the company in November 2005.