TSC Ratings' Updates: Cisco

We've downgraded Polo Ralph Lauren(RL), which engages in the design, marketing, and distribution of lifestyle products, from buy to hold. Strengths include its growth in earnings per share, increase in net income and revenue growth. Weaknesses include a decline in the stock price during the past year and disappointing return on equity.

EPS have risen by 13.4% in the most recent quarter compared with the same quarter a year ago. The company has demonstrated a pattern of positive earnings per share growth over the past two years that we feel should continue. This trend suggests that the performance of the business is improving. During the past fiscal year, Polo Ralph Lauren increased its bottom line by earning $3.99 vs. $3.73 in the prior year. This year, the market expects an improvement in earnings to $4.09. The net income increased by 7.8% when compared to the same quarter one year prior, from $88.30 million to $95.20 million, outperforming the S&P 500 and the textiles, apparel and luxury goods industry average.

Return on equity has slightly decreased from the same quarter one year ago, underperforming the industry average but outperforming the S&P 500. The gross profit margin is rather high; currently it is at 57.30%, having increased from the same quarter the previous year, but the net profit margin of 8.50% trails the industry average. Shares plunged by 35.54% over the year. This decline should not necessarily be interpreted as a negative; it could be one of the factors that may help make the stock attractive down the road. Right now, however, we believe that it is too soon to buy.

Other ratings changes include Ingersoll-Rand(IR) and Jones Apparel Group(JNY), both downgraded from hold to sell.

All ratings changes generated on Oct. 23 are listed below.

Ticker	Company	Current	Change	Previous
ADP	Automatic Data Processing	HOLD	Downgrade	BUY
AFG	American Financial Group	HOLD	Downgrade	BUY
AIRT	Air T	HOLD	Downgrade	BUY
AIZ	Assurant	HOLD	Downgrade	BUY
ALC	Assisted Living Concepts	SELL	Downgrade	HOLD
ANCX	Access National	HOLD	Upgrade	SELL
ATW	Atwood Oceanics	HOLD	Downgrade	BUY
AXS	Axis Capital	HOLD	Downgrade	BUY
BIDZ	Bidz.com	SELL	Downgrade	HOLD
BLKB	Blackbaud	HOLD	Downgrade	BUY
BPOP	Popular	SELL	Downgrade	HOLD
CBE	Cooper Industries	HOLD	Downgrade	BUY
CLR	Continental Resources	SELL	Downgrade	HOLD
CNX	Consol Energy	HOLD	Downgrade	BUY
COCO	Corinthian Colleges	HOLD	Downgrade	BUY
CRZO	Carrizo Oil & Gas	SELL	Downgrade	HOLD
CSCO	Cisco Systems	HOLD	Downgrade	BUY
CSGP	Costar Group	HOLD	Downgrade	BUY
DD	DuPont	HOLD	Downgrade	BUY
DRC	Dresser-Rand	HOLD	Downgrade	BUY
DVR	Cal Dive	SELL	Downgrade	HOLD
EMN	Eastman Chemical	HOLD	Downgrade	BUY
ESV	Ensco	HOLD	Downgrade	BUY
EYE	Advanced Medical Optics	SELL	Downgrade	HOLD
FOSL	Fossil	HOLD	Downgrade	BUY
FPFC	First Place Financial	SELL	Downgrade	HOLD
GGB	Gerdau	HOLD	Downgrade	BUY
GIFI	Gulf Island Fabrication	HOLD	Downgrade	BUY
GSK	GlaxoSmithKline	HOLD	Downgrade	BUY
HMNF	HMN Financial	SELL	Downgrade	HOLD
IR	Ingersoll-Rand	SELL	Downgrade	HOLD
IXYS	IXYS	HOLD	Downgrade	BUY
JBX	Jack in the Box	HOLD	Downgrade	BUY
JNY	Jones Apparel Group	SELL	Downgrade	HOLD
KTC	KT	SELL	Downgrade	HOLD
MAT	Mattel	HOLD	Downgrade	BUY
MCK	McKesson	HOLD	Downgrade	BUY
MIDD	Middleby	HOLD	Downgrade	BUY
MIL	Millipore	HOLD	Downgrade	BUY
MTOX	Medtox Scientific	HOLD	Downgrade	BUY
MTRX	Matrix Service	HOLD	Downgrade	BUY
MWA	Mueller Water Products	SELL	Downgrade	HOLD
NTRS	Northern Trust	HOLD	Downgrade	BUY
PEET	Peet's Coffee & Tea	HOLD	Downgrade	BUY
PH	Parker-Hannifin	HOLD	Downgrade	BUY
PII	Polaris Industries	HOLD	Downgrade	BUY
POM	Pepco Holdings	HOLD	HOLD	BUY
PQ	Petroquest Energy	HOLD	Downgrade	BUY
PRAA	Portfolio Recovery	HOLD	Downgrade	BUY
PWRD	Perfect World	SELL	Downgrade	HOLD
RFIL	RF Industries	HOLD	Downgrade	BUY
RICK	Rick's Caberet	HOLD	Downgrade	BUY
RL	Polo Ralph Lauren	HOLD	Downgrade	BUY
RSTI	Rofin Sinar	HOLD	Downgrade	BUY
RYN	Rayonier	HOLD	Downgrade	BUY
SAP	SAP	HOLD	Downgrade	BUY
SRE	Sempra Energy	HOLD	Downgrade	BUY
TER	Teradyne	SELL	Downgrade	HOLD
TNE	Tele Norte Leste	HOLD	Downgrade	BUY
UNM	Unum Group	HOLD	Downgrade	BUY
VIST	VIST Financial	SELL	Downgrade	HOLD
VR	Validus	SELL	Downgrade	HOLD
VSEA	Varian Semiconductor	HOLD	Downgrade	BUY
VVC	Vectren	HOLD	Downgrade	BUY
WINN	Winn-Dixie Stores	SELL	Downgrade	HOLD
WLFC	Willis Lease Finance	HOLD	Downgrade	BUY
WOOF	VCA Antech	HOLD	Downgrade	BUY
WTS	Watts Water Technologies	HOLD	Downgrade	BUY

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.

However, the rating does not incorporate all of the factors that can alter a stock's performance. For example, it doesn't always factor in recent corporate or industry events that could affect the stock price, nor does it include recent technology developments and competitive dynamics that may affect the company.

For those reasons, we believe a rating alone cannot tell the whole story, and that it should be part of an investor's overall research.

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