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Each weekday, 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.

Department store operator


(M) - Get Free Report

has been downgraded to hold. While the company's profit margins have been expanding, net income is deteriorating, debt management has been poor, and return on equity has been disappointing. On Thursday, Macy's said same-store sales, or sales at stores open at least a year, rose 2.4% in August, beating Wall Street's estimates, but the company warned that it expected comps to drop 1% to 3% in September. Last month, the company posted a second-quarter profit that was sharply lower than its original forecast, and it cut its guidance for the full year. Macy's second-quarter earnings fell to $74 million, or 16 cents a share, from $317 million, or 57 cents a share, as the company recorded more charges tied to integrating its 2005 acquisition of May Department Stores. Excluding charges, Macy's earned 29 cents a share. Macy's had been rated buy since September 2005.

Empresas ICA


, a Mexicon construction company, has been downgraded to hold. The company has enjoyed revenue growth and has a largely solid financial position with reasonable debt levels. However, net income has been deteriorating, return on equity has been disappointing, and profit margins have been poor. Moreover, its revenue is growing more slowly than the industry average.

Last week, shareholders approved plans to offer up to 90 million new shares worth around $550 million in Mexico and the U.S. to finance growth. The company has been awarded several major infrastructure projects over the last few years. Empresas ICA had been rated buy since June.

Nalco Holding

( NLC), which provides chemicals for water treatment and industrial processes, has been upgraded to buy. The company has seen growth in earnings per share, net income and revenue, along with good cash flow from operations and expanding profit margins. Ratings believes these factors should outweigh the company's generally poor debt management.

Last week, Nalco backed its full-year guidance, which includes 5% organic sales growth and a 50% increase in earnings per share. Nalco has reported significant earnings-per-share improvement in the most recent quarter compared with a year ago. The company has demonstrated a pattern of positive earnings-per-share growth over the past two years. In July, the company's board authorized the repurchase of up to $300 million of its common shares. The company was initiated with a sell rating in December 2005.

Newspaper publisher

Sun-Times Media Group


has been upgraded to hold. The company has enjoyed notable return on equity, attractive valuation levels and compelling growth in net income. However, operating cash flow is weak, profit margins are poor, and the stock's performance has been generally disappointing.

In August, Sun-Times Media Group reported second-quarter net income of $528 million, or $6.57 a share, up from with $20.6 million, or 24 cents a share, a year ago. Revenue slipped to $94.3 million from $107.4 million. The company, formerly known as Hollinger International, saw a large benefit from a Canadian tax settlement. Last week, the company said there could be a delay in recovering funds from Canadian investments because of difficulties in the commercial paper market. Sun-Times Media Group had been rated sell since September 2005.

Iris International

( IRIS), which makes in-vitro diagnostics products, has been upgraded to buy. The company enjoys a largely solid financial position with reasonable debt levels and has seen growth in net income and revenue with good cash flow from operations and expanding profit margins. In August, Iris said it swung to a net profit of $1.8 million, or 10 cents a share, in the second quarter from a net loss of $4.5 million, or 25 cents a share, a year earlier. The prior-year results were hit by acquisition-related expenses. Revenue rose 26% to $21 million. Wall Street was expecting the company to earn 9 cents a share on revenue of $20.1 million. The company's net income growth from a year ago has significantly exceeded that of the health care equipment & supplies industry. Iris International had been rated hold since March 2006.

Additional ratings changes are listed below.