Stock Upgrades, Downgrades from TheStreet.com Ratings

Each business day, 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.

Benihana(BNHN Quote), which operates a Japanese restaurant chain, has been downgraded to hold. The company's strengths can be seen in several areas, such as its revenue growth, largely solid financial position with reasonable debt levels by most measures and reasonable valuation levels. However, Benihana has also seen disappointing return on equity, poor profit margins and feeble EPS growth.

Second-quarter restaurant sales increased 13.6% to $67 million, while company-wide comparable restaurant sales, or sales at restaurants open at least a year, increased 2.8%. Net income totaled $2.5 million, or 15 cents a share, compared with $2.6 million, or 15 cents a share, a year ago. The company's debt-to-equity ratio is very low at 0.03 and is currently below that of the industry average, implying that there has been very successful management of debt levels. Benihana had been rated buy since December 2005.