The following ratings changes were generated on Friday, Oct. 10.

We've downgraded

Arch Coal

(ACI) - Get Report

, one of the largest coal producers in the U.S., from buy to hold. The company's strengths include its compelling growth in net income, revenue growth and good cash flow from operations. However, we also find weaknesses including a decline in the stock price during the past year, generally poor debt management and poor profit margins.

Net income grew by 200.9%, from $37.55 million to $113 million, from the same quarter a year ago, significantly exceeding the

S&P 500

and the oil, gas and consumable fuels industry. Revenues rose by 28%, underperforming the industry average of 32%. Return on equity has improved slightly when compared with the same quarter one year prior, exceeding the S&P 500 but underperforming the industry average.

Although Arch Coal's shares are off by a sharp 35.13% on the year, its decline was actually not as bad as the broader market plunge during that same time frame. One factor that may have helped cushion the fall somewhat was the improvement in the company's EPS over the same quarter last year. But don't assume that the stock can now be tagged as cheap and attractive. Based on its current price in relation to its earnings, Arch Coal is still more expensive than most of the other companies in its industry. Its debt-to-equity ratio of 0.77 is somewhat low overall, but it is high when compared to the industry average, implying that the management of the debt levels should be evaluated further. The company's quick ratio of 0.33 is very low and demonstrates very weak liquidity.

We've downgraded

F5 Networks

(FFIV) - Get Report

, which provides application delivery networking products, from buy to hold. The company's strengths include its robust revenue growth, largely solid financial position with reasonable debt levels by most measures and good cash flow from operations. However, we also find weaknesses including a generally disappointing performance in the stock itself, disappointing return on equity and feeble EPS growth.

Revenues rose by 25% over the same quarter one year prior, exceeding the industry average of 0.3%, though EPS declined. F5 has no debt to speak of, resulting in a debt-to-equity ratio of zero, a relatively favorable sign. Its quick ratio of 2.16 demonstrates the ability of the company to cover short-term liquidity needs. The company's gross profit margin has increased on the year and is very high at 80.60%, but its net profit margin of 11.60% trails the industry average.

The stock is down 50.52% over the past 12 months, underperforming the S&P 500, but basedon its current price in relation to its earnings, F5 is still more expensive than most of the other companies in its industry. ROE has slightly decreased from the same quarter one year prior, implying a minor weakness in the organization and underperforming both the communications equipment industry and the S&P 500.

We've downgraded pharmaceutical company

Eli Lilly

(LLY) - Get Report

from buy to hold. Its strengths include impressive record of EPS growth, compelling growth in net income and revenue growth, However, we find that the stock has had a generally disappointing performance in the past year.

EPS rose by 44.3% in the most recent quarter compared with the same quarter a year ago, building on a two-year trend of positive EPS growth that we feel should continue, suggesting improving business performance. During the past fiscal year, Eli Lilly increased its bottom line by earning $2.71 vs. $2.45, and this year, the market expects further improvement to $3.94. The company's net income growth of 44.5%, from $663.6 million to $958.8 million, significantly exceeded that of the S&P 500 and the pharmaceuticals industry.

Thought it has decreased from the same period last year, Eli Lilly's gross profit margin is currently very high at 83.3%. Net profit margin, however, trails the industry average at 18.6%. Shares have plunged by 43.27% over the year, apparently dragged down in part by the decline we have seen in the S&P 500. This decline could help make the stock attractive down the road, but for now, we believe it is too soon to buy.

We've downgraded insurance provider

MetLife

(MET) - Get Report

from buy to hold. The company's strengths include its revenue growth, attractive valuation levels and largely solid financial position with reasonable debt levels by most measures. However, we also find weaknesses including poor profit margins, weak operating cash flow and a generally disappointing performance in the stock itself.

Despite growing revenue by 4% over the same quarter one year prior, the company underperformed as compared with the industry average of 10.1%, and EPS declined. MetLife's debt-to-equity ratio of 0.66 is somewhat low over all but exceeds the industry average, implying that the management of the debt levels should be evaluated further. Net operating cash flow has declined marginally to $1,885.00 million, or 2.38%, when compared with the samequarter last year, but MetLifeis still fairing well by exceeding the industry average cash flow growth rate of -41.62%.

MetLife's gross profit margin is extremely low, coming in at 12.40%, a decrease from the same quarter last year. In addition, its net profit margin of 6.90% trails that of the industry average.

We've downgraded

Nucor

(NUE) - Get Report

, a manufacturer of steel products, from buy to hold, based on the company's double-digit top-line growth, strong earnings and solid liquidity position, as well as declining margins, diminishing returns and rising debt level. Although the company has made strategic acquisitions, weakening product demand and tough economic conditions are areas of concern.

Nucor's second-quarter of fiscal-year 2008 revenue surged 70.1% year over year to $7.09 billion. Net earnings soared 68.4% to $580.75, or $1.94 per share, from $344.85 million, or $1.14 per share, in the second quarter of 2007, fueled by higher pricing, key acquisitions and strong global demand for the company's steel products. Cash and cash equivalents surged 186.3% to $2.79 billion, from $975.32 million in the prior year's quarter, and a quick ratio of 1.93 suggests the company's ability to meet its short-term cash requirements. Looking forward to the third quarter, Nucor expects earnings of $1.80 per diluted share to $1.85 per diluted share. The company anticipates 2008 capital expenditures of $800 million.

The company's gross profit margin decreased 162 basis points during the quarter under review, to 19.06% from 20.68%. Operating margin declined 79 basis points, to 13.97% from 14.76%. Return on assets shrank 792 basis points to 11.58%, and return on equity descended 1,040 basispoints to 21.49%. Total debt jumped to $3.27 billion during the quarter, and stockholders' equity increased by 55.9% to $8.08 billion. The debt-to-equity ratio worsened to 0.40 from 0.18. As a result, interest expenses swelled 118.4% to $34.29 million from $15.70 million, which dropped the interest coverage ratio to 28.90 from 39.19 a year ago.

Other ratings changes include

Audiovox

(VOXX) - Get Report

and

Meridian Resource

(NL) - Get Report

, both of which we downgraded from hold to sell.

All ratings changes generated on Oct. 10 are listed below.

Ticker

Company

Current

Change

Previous

ACI

ARCH COAL INC

HOLD

Downgrade

BUY

ADVS

ADVENT SOFTWARE INC

HOLD

Downgrade

BUY

AEP

AMERICAN ELECTRIC POWER CO

HOLD

Downgrade

BUY

AETI

AMERICAN ELECTRIC TECH INC

SELL

Initiated

AMG

AFFILIATED MANAGERS GRP INC

HOLD

Downgrade

BUY

AXB

ALEXANDER & BALDWIN INC

HOLD

Downgrade

BUY

AYE

ALLEGHENY ENERGY INC

HOLD

Downgrade

BUY

BBG

BILL BARRETT CORP

HOLD

Downgrade

BUY

BKCC

BLACKROCK KELSO CAPITAL CORP

SELL

Downgrade

HOLD

BSDM

BSD MEDICAL CORP/DE

SELL

Downgrade

HOLD

BTH

BLYTH INC

SELL

Downgrade

HOLD

BWINA

BALDWIN & LYONS

HOLD

Downgrade

BUY

CEPH

CEPHALON INC

HOLD

Downgrade

BUY

CFI

CULP INC

HOLD

Downgrade

BUY

CYBS

CYBERSOURCE CORP

HOLD

Downgrade

BUY

CYH

COMMUNITY HEALTH SYSTEMS INC

SELL

Downgrade

HOLD

DBLE

DOUBLE EAGLE PETROLEUM CO

SELL

Downgrade

HOLD

DFG

DELPHI FINANCIAL GRP

HOLD

Downgrade

BUY

ENS

ENERSYS INC

HOLD

Downgrade

BUY

ETEL

ETELECARE GLOBAL SOLUTION

HOLD

Upgrade

SELL

EXM

EXCEL MARITIME CARRIERS LTD

HOLD

Downgrade

BUY

FEIM

FREQUENCY ELECTRONICS INC

SELL

Downgrade

HOLD

FFDF

FFD FINANCIAL CORP

HOLD

Downgrade

BUY

FFIV

F5 NETWORKS INC

HOLD

Downgrade

BUY

FISV

FISERV INC

HOLD

Downgrade

BUY

FRD

FRIEDMAN INDUSTRIES INC

HOLD

Downgrade

BUY

FSIN

FUSHI COPPERWELD INC

SELL

Downgrade

HOLD

GEOI

GEORESOURCES INC

SELL

Downgrade

HOLD

GMT

GATX CORP

HOLD

Downgrade

BUY

HCFL

HOME CITY FINANCIAL CORP

SELL

Downgrade

HOLD

HIL

HILL INTERNATIONAL INC

HOLD

Downgrade

BUY

HLTH

HLTH CORP

HOLD

Downgrade

BUY

KNM

KONAMI CORP

HOLD

Downgrade

BUY

LINC

LINCOLN EDUCATIONAL SERVICES

HOLD

Downgrade

BUY

LLY

LILLY (ELI) & CO

HOLD

Downgrade

BUY

LUX

LUXOTTICA GROUP SPA

HOLD

Downgrade

BUY

MET

METLIFE INC

HOLD

Downgrade

BUY

MFRI

MFRI INC

HOLD

Upgrade

SELL

MICC

MILLICOM INTL CELLULAR SA

HOLD

Downgrade

BUY

MMC

MARSH & MCLENNAN COS

HOLD

Downgrade

BUY

MMP

MAGELLAN MIDSTREAM PRTNRS LP

HOLD

Downgrade

BUY

NUE

NUCOR CORP

HOLD

Downgrade

BUY

NUHC

NU HORIZONS ELECTRS CORP

SELL

Downgrade

HOLD

ORLY

O'REILLY AUTOMOTIVE INC

HOLD

Downgrade

BUY

OXPS

OPTIONSXPRESS HOLDINGS INC

HOLD

Downgrade

BUY

PMACA

PMA CAPITAL CORP

HOLD

Downgrade

BUY

PTP

PLATINUM UNDERWRITERS HLDG

HOLD

Downgrade

BUY

RENT

RENTRAK CORP

HOLD

Downgrade

BUY

RNR

RENAISSANCERE HOLDINGS LTD

HOLD

Downgrade

BUY

ROC

ROCKWOOD HOLDINGS INC

HOLD

Downgrade

BUY

SBS

CIA SANEAMENTO BASICO ESTADO

HOLD

Downgrade

BUY

SWSI

SUPERIOR WELL SERVICES INC

HOLD

Downgrade

BUY

SYMC

SYMANTEC CORP

HOLD

Downgrade

BUY

TMK

TORCHMARK CORP

HOLD

Downgrade

BUY

TMR

MERIDIAN RESOURCE CORP

SELL

Downgrade

HOLD

TNB

THOMAS & BETTS CORP

HOLD

Downgrade

BUY

TRMK

TRUSTMARK CORP

HOLD

Downgrade

BUY

TV

GRUPO TELEVISA SA

HOLD

Downgrade

BUY

TWOC

TRANS WORLD CORP/NV

SELL

Downgrade

HOLD

UEPS

NET 1 UEPS TECHNOLOGIES INC

HOLD

Downgrade

BUY

VLTR

VOLTERRA SEMICONDUCTOR CORP

HOLD

Downgrade

BUY

VOXX

AUDIOVOX CORP

SELL

Downgrade

HOLD

WDDD

WORLDS.COM INC

SELL

Initiated

WSH

WILLIS GROUP HOLDINGS LTD

HOLD

Downgrade

BUY

ZEUS

OLYMPIC STEEL INC

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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This article was written by a staff member of TheStreet.com Ratings.