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.

Pharmaceutical giant Pfizer ( PFE) has been downgraded to a hold from a buy. The company's primary strength is its expanding profit margins. However, the company saw EPS decline by 38.7% in the second quarter compared with the same period a year ago, and net income decreased by 47.5% over the same time frame. Pfizer's stock has sunk by 7.69% in the last 12 months and is selling for less than others in its industry in relation to its current earnings. However, this weakness in the stock price does not justify a buy rating at this time. Pfizer had been rated a buy since August 2006.

Investment bank Goldman Sachs ( GS) has been downgraded to a hold from a buy. The company's strengths are seen in its revenue growth, notable return on equity and attractive valuation levels. As a counter to these strengths, TheStreet.com Ratings finds weak operating cash flow.

Goldman's debt-to-equity ratio of 15.29 is higher than that of the industry, implying very poor management of debt levels within the company. The ratings change occurred prior to the firm's announcement Monday morning that outside investors would join the company in adding $3 billion to bail out its struggling Global Equity Opportunities fund. The company had been rated a buy since March 2006.

Archstone-Smith Trust ( ASN) owns, develops, acquires and operates income-producing apartment communities. It has been downgraded to a hold from a buy. The company has shown robust revenue growth, reasonable debt levels by most measures and a 12.28% increase in its stock price over the past year. However, it also shows a disappointing return on equity and poor profit margins. In the most recent quarter, EPS sunk by 63.08% to $2.72 per share, from $3.28 per share in the second quarter of 2006. Archstone-Smith had been rated a buy since April 2006.

Agrium ( AGU) produces and markets agricultural nutrients and specialty fertilizers. It has been upgraded to a buy from a hold. The company shows revenue growth, a largely solid financial position with reasonable debt levels by most measures, solid stock price performance and EPS growth of 60.37% in the second quarter compared with the same period last year. Over the same timeframe, net income increased 61.26% to $229 million. Strengths like these outweigh the company's somewhat disappointing return on equity.

Agrium's strong earnings growth has boosted the company's share price by 60.37% over the past 12 months, driving it to a price that is relatively more expensive compared with the rest of its industry. Still, the higher price is justified.

Automaker DaimlerChrysler ( DAI) has been downgraded to a hold from a buy. The company has shown an impressive record of EPS growth, and its stock price has increased by 65.06% in the last year. Also, its net income increased by 618.15% in the first quarter of fiscal 2007 compared with the same period last year. In the past fiscal year, the company increased its bottom line by earning $4.14 versus $3.31 in the prior year. As a counter to these strengths, DaimlerChrysler shows generally poor debt management and poor profit margins. Its debt-to-equity ratio of 2.43 is above that of the industry average. The company had been rated a buy since August 2006.

Additional ratings changes are listed below.
Stock Upgrades, Downgrades
Company Name Ticker Change New Rating Former Rating
1-800-Flowers FLWS Upgrade Buy Hold
Advanced Energy Industries AEIS Downgrade Hold Buy
Agrium AGU Upgrade Buy Hold
Amcon Distributing DIT Upgrade Hold Sell
Amerco UHAL Upgrade Buy Hold
Archstone-Smith Trust ASN Downgrade Hold Buy
California Water Service Group CWT Upgrade Buy Hold
Carrolton Bancorp CRRB Downgrade Hold Buy
DaimlerChrysler DAI Downgrade Hold Buy
Downey Financial DSL Downgrade Hold Buy
Encision ECI Downgrade Sell Hold
Encore Acquisition EAC Upgrade Buy Hold
Everlast Worldwide EVST Downgrade Hold Buy
FirstCity Financial FCFC Downgrade Hold Buy
Goldman Sachs GS Downgrade Hold Buy
Allied Motion Technologies AMOT Downgrade Hold Buy
Hecla Mining HL Downgrade Hold Buy
InfoSpace INSP Downgrade Sell Hold
InterDigital IDCC Downgrade Hold Buy
MTS Medication Technologies MPP Downgrade Hold Buy
Mentor MNT Upgrade Buy Hold
Nortech Systems NSYS Downgrade Hold Buy
O'Charley's CHUX Downgrade Hold Buy
Innospec IOSP Downgrade Hold Buy
Renasant RNST Downgrade Hold Buy
Pfizer PFE Downgrade Hold Buy
Polyone POL Downgrade Hold Buy
Progress Software PRGS Downgrade Hold Buy
Southwest Water SWWC Upgrade Buy Hold
SunOpta STKL Upgrade Buy Hold
Universal UVV Downgrade Hold Buy
On Track Innovations OTIV Downgrade Sell Hold
RedEnvelope REDE Downgrade Sell Hold
Syneron Medical ELOS Upgrade Buy Hold
Primus Guaranty PRS Downgrade Sell Hold
Foxhollow Technologies FOXH Upgrade Hold Sell
Ormat Technologies ORA Upgrade Buy Hold
Bluelynx Holdings BXC Downgrade Sell Hold
FTD Group FTD Upgrade Buy Hold
Natural Resource Partners NSP Upgrade Buy Hold
Boardwalk Pipeline Partners BWP Upgrade Hold Sell
Nighthawk Radiology NHWK Upgrade Hold Sell
Luna Innovations LUNA Initiation Sell n/a
Source: TheStreet.com Ratings

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