Each weekday, 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. Investment bank Merrill Lynch ( MER) has been downgraded to hold from buy. The company shows mixed results in its recent quarter. Its revenue growth of 42.5% in the second quarter of 2007 compared with the same period last year exceeded the industry average of 3.5%, helping EPS increase by 37.4% in the same timeframe. As a counter to these strengths, the company has not been very careful in managing its balance sheet. Its stock price declined 16.48% in the second quarter, and although it has been up 6.26% in the last 12 months, there is currently no conclusive evidence that warrants the purchase or sale of this stock. Merrill Lynch had been rated a buy since March 2006. Aegon ( AEG), which provides life insurance, pensions, savings and investment products, has been downgraded to hold from buy. The company has seen its stock price increase 6.22% over the past 12 months, and it displays attractive valuation levels. But it shows some weaknesses. Its revenue declined by 2.4% in the first quarter, compared with the same period last year, and its net income has significantly underperformed that of the insurance industry. It decreased 15.2% during the quarter compared with the same time last year. Aegon's return on equity decreased slightly during the quarter, compared with last year's timeframe, implying a minor weakness in the organization. It had been rated a buy since May 2007.