AT&T, Tiffany, Cabot: Ratings Changes

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BOSTON (TheStreet) -- TheStreet.com's stock-rating model upgraded chemical maker Cabot(CBT Quote) to "hold."

The numbers: Cabot swung to a fiscal third-quarter loss of $12 million, or 19 cents a share, from a profit of $27 million, or 43 cents, in the year-earlier period. Revenue fell 39% to $511 million. Its gross margin rose from 22% to 25%, but its operating margin fell from 7% to 4%. Cabot has ample liquidity, evident in its quick ratio of 1.6. A debt-to-equity ratio of 0.5 is less than the industry average, indicating conservative leverage.

The stock: Cabot has advanced 29% this year, outpacing major U.S. indices. The stock offers an attractive 3.6% dividend yield.

The model upgraded telecommunications provider AT&T(T Quote) to "buy."

The numbers: Second-quarter net income dropped 15% to $3.2 billion, or 54 cents a share, as revenue remained steady at $31 billion. Its gross margin decreased from 61% to 59% and its operating margin fell from 21% to 18%. A quick ratio of 0.6 indicates less-than-ideal liquidity. And the company holds $77 billion of debt. But a debt-to-equity ratio of 0.8 reflects a balanced capital structure.

The stock: AT&T has fallen 9% this year, lagging behind major U.S. indices. The stock trades at a price-to-earnings ratio of 13, a discount to the market and telecom peers. The shares offer a 6.3% dividend yield, higher than the average for the S&P 500 Index.

The model upgraded jewelry retailer Tiffany(TIF Quote) to "buy."

The numbers: Second-quarter net income fell 30% to $57 million, or 46 cents. Revenue declined 16% to $612 million. Its gross margin declined from 63% to 55% and its operating margin fell from 18% to 14%. The company has a strong financial position, evident in its quick ratio of 1.7 and debt-to-equity ratio of 0.5.