The following ratings' changes were generated on Monday, Oct. 6.

City National ( CNY) has been upgraded from hold to buy. City National Corporation operates as the bank holding company for City National Bank, which provides banking, investment and trust services. The company's strengths can be seen in multiple areas, such as its good cash flow from operations and expanding profit margins. We feel these strengths outweigh the fact that the company has had lackluster performance in the stock itself.

Net operating cash flow has significantly increased by 107.45% to $3.17 million when compared with the same quarter last year. Despite an increase in cash flow of 107.45%, CNY is still growing at a significantly lower rate than the industry average of 336.61%.

The gross profit margin for CNY is currently very high, coming in at 71.50%. Regardless of CYN's high profit margin, it has managed to decrease from the same period last year. Despite the mixed results of the gross profit margin, CYN's net profit margin of 12.90% compares favorably with the industry average.

CYN, with its decline in revenue, underperformed when compared with the industry average of 10.8%. Since the same quarter one year prior, revenue has slightly dropped by 8.1%. Weakness in the company's revenue seems to have hurt the bottom line, decreasing earnings per share.

The company's current return on equity has slightly decreased from the same quarter one year prior. This implies a minor weakness in the organization. Compared with other companies in the commercial banking industry and the overall market on the basis of return on equity, CNY has outperformed in comparison with the industry average, but it has underperformed when compared with the S&P 500.

CYN's share price is down 18.96% over the past year. We believe this reflects several factors -- the market's overall decline (which was actually deeper), the sharp decline in the company's earnings per share and other weaknesses. Despite the decline in its share price over the last year, this stock is still more expensive (when compared with its current earnings) than most other companies in its industry. We feel, however, that other strengths this company displays compensate for this.

CYN had been rated a hold since January 7, 2008.

Carlisle Companies ( CSL) has been downgraded from buy to hold. Carlisle Companies engages in the manufacture and sale of construction materials in the U.S. and internationally. It operates in five segments: construction materials, industrial components, transportation products, specialty products and general industry. The company's strengths can be seen in multiple areas, such as its increase in net income, robust revenue growth and largely solid financial position with reasonable debt levels by most measures.

However, as a counter to these strengths, we also find weaknesses including poor profit margins, weak operating cash flow and a generally disappointing performance in the stock itself.

The company, on the basis of net income growth from the same quarter one year ago, has significantly outperformed against the S&P 500 and exceeded the industrial conglomerates industry average. The net income increased by 1.7% when compared with the same quarter one year prior, going from $53.40 million to$54.30 million.

Despite its growing revenue, the company underperformed as compared with the industry average of 19.4%. Since the same quarter one year prior, revenue rose by 16.8%. This growth in revenue appears to have trickled down to the company's bottom line, improving the earnings per share.

CSL has improved earnings per share by 5.7% in the most recent quarter compared with the same quarter a year ago. The company has demonstrated a pattern of positive earnings-per-share growth over the past two years. However, we anticipate underperformance relative to this pattern in the coming year. During the past fiscal year, CSL has increased its bottom line by earning $3.39 vs. $2.87 in the prior year. For the next year, the market is expecting a contraction of 15.2% in earnings ($2.88 vs. $3.39).

The gross profit margin for CSL is rather low; currently it is at 21.90%. It has decreased from the same quarter the previous year. Along with this, the net profit margin of 6.30% trails that of the industry average.

Net operating cash flow has decreased to $79.00 million or 37.46% when compared with the same quarter last year. In addition, when comparing it with the cash generation rate to the industry average, the firm's growth is significantly lower.

CSL had been rated a buy since Sept. 25, 2008.

Central European Media Enterprises ( CETV) has been downgraded from buy to hold. Central European Media Enterprises, together with its subsidiaries, invests in, develops, and operates commercial television channels in the central and eastern Europe. The company'sstrengths can be seen in multiple areas, such as its robust revenue growth, impressive record of earnings-per-share growth and compelling growth in net income.

However, as a counter to these strengths, we find that the stock has had a generally disappointing performance in the past year.

The revenue growth greatly exceeded the industry average of 5.3%. Since the same quarter one year prior, revenue rose by 41.2%. Growth in the company's revenue appears to have helped boost the earnings per share.

CETV reported significant earnings per share improvement in the most recent quarter compared with the same quarter a year ago. The company has demonstrated a pattern of positive earnings-per-share growth over the past two years. During the past fiscal year, CETV increased its bottom line by earning $2.08 vs. 59 cents in the prior year.

CETV's debt-to-equity ratio of 0.67 is somewhat low overall, but it is high when compared with the industry average, implying that the management of the debt levels should be evaluated further. Even though the debt-to-equity ratio shows mixed results, the company's quick ratio of 2.61 is very high and demonstrates verystrong liquidity.

The return on equity has improved slightly when compared with the same quarter one year prior. This can be construed as a modest strength in the organization. When compared with other companies in the media industry and the overall market, CETV's return on equity is below that of both the industry average and the S&P 500.

CETV's stock share price has done very poorly compared with where it was a year ago: Despite any rallies, the net result is that it is down by 49.59%, which is also worse that the performance of the S&P 500 Index.

Investors have so far failed to pay much attention to the earnings improvements the company has managed to achieve over the last quarter. Although its share price is down sharply from a year ago, do not assume that it can now be tagged as cheap and attractive. The reality is that, on the basis of its current price in relation to its earnings, CETV is still more expensive than most of the other companies in its industry.

CETV had been rated a buy since Aug. 21, 2007.

Baker Hughes ( BHI) has been downgraded from buy to hold. Baker Hughes incorporated supplies products and technology services, and systems to the oil and natural gas industries worldwide. It operates in two segments: drilling and evaluation, and completion and production.

The company displayed a steady financial performance in the recently concluded quarter, on the back of a rise in the demand for BHI's products and services. Furthermore, BHI's share-repurchase program and good fundamentals are enhancing shareholders' value.

The company has displayed a steady financial performance on the back of rise in demand for its products and services, following an increase in capital expenditure by oil and gas companies. The company's revenue increased 8.0% to $2.67 billion in the first quarter of fiscal year 2008, compared with the first quarter of fiscal year 2007. Net income increased at a lower rate of 5.4% to $395.00 million, restricted by margin contraction and higher interest expenses.

The company's performance in the last three years has been impressive, with revenue increasing at a compounded annual growth rate (CAGR) of 18.7%, and net income recording CAGR of 35.7%.

BHI recorded a return-on-equity (ROE) of 24.89% as of the end of first quarter fiscal year 2008, due to net income growth and share repurchases in the last one year. Though ROE was slightly lower than the industry average, it was significantly higher than the S&P 500 average. During the first quarter fiscal year 2008, BHI repurchased 8.20 million shares for a total of $567.80 million. At the end of first quarter of fiscal year 2008, the company had authorization to repurchase about $256.20 million worth of shares. We expect this to support its ROE going forward.

The company reported a debt-to-equity ratio is 0.25 as of the end of first quarter fiscal year 2008. The company projects its capital expenditure budget for the full year 2008 to be $1.30 billion. In addition, BHI has$1.03 billion of cash and equivalents balance. This together with a reasonable debt-to-equity ratio provides the financial flexibility to fund new projects and enhance value for its shareholders.

Oil's price has been in an uptrend in the past two years, and it is currently trading at very high level. This could lead to either a decline in demand or increased use of alternatives, which in turn will slowdown drilling activity. This may affect the performance of the company. Furthermore, the slowdown in the U.S economy and more job cuts could have an adverse impact on the oil industry.

Baker Hughes' performance could be affected by uncertainty in North America activity as the growth rate in drilling activity has slowed and natural gas inventories continue to build. Additionally, the company faces challenges from declining margins, which may restrict future earnings potential.

BHI had been rated a buy since Oct. 3, 2008.

Aracruz Celulose S.A. ( ARA) has been downgraded from buy to hold. Aracruz Celulose S.A. engages in the production and sale of bleached hardwood kraft market pulp primarily in Brazil. The company's strengths can be seen in multiple areas, such as its revenue growth, largely solid financial position with reasonable debt levels by most measures and reasonable valuation levels.

However, as a counter to these strengths, we also find weaknesses including feeble growth in the company's earnings per share, weak operating cash flow anda generally disappointing performance in the stock itself.

The revenue growth came in higher than the industry average of 10.6%. Since the same quarter one year prior, revenue has slightly increased by 8.9%. This growth in revenue does not appear to have trickled down to the company's bottom line, as displayed by a decline in earnings per share.

The debt-to-equity ratio is somewhat low, currently at 0.68, and is less than the industry average, implying that there has been a relatively successful effort in the management of debt levels. Along with this, the company maintains a quick ratio of 2.62, which clearly demonstrates the ability to cover short-term cash needs.

44.60% is the gross profit margin for ARA which we consider to be strong. Regardless of ARA's high profit margin, it has managed to decrease from the same period last year. Despite the mixed results of the gross profit margin, ARA's net profit margin of 13.20% significantly outperformed against the industry.

Net operating cash flow has decreased to $126.12 million or 34.24% when compared with the same quarter last year. In addition, when comparing it with the cash generation rate to the industry average, the firm's growth is significantly lower.

ARA's earnings per share declined by 43.0% in the most-recent quarter compared with the same quarter a year ago. Earnings per share have declined over the last year. We anticipate that this should continue in the coming year. During the past fiscal year, reported lower earnings of $7.84 vs. $8.46 in the prior year. For the next year, the market is expecting a contraction of 54.4% in earnings ($3.58 vs. $7.84).

ARA had been rated a hold since Oct. 3, 2006.

The remaining ratings' changes generated on October 6 are listed below.
Ticker Company Current Change Previous
AMAC American Medical Alert Corp HOLD Downgrade BUY
ARA Aracruz Celulose HOLD Downgrade BUY
ASMI ASM International HOLD Downgrade BUY
BHI Baker Hughes HOLD Downgrade BUY
CAE Cascade Corp. HOLD Downgrade BUY
CETV Central European Media HOLD Downgrade BUY
CLUB Town Sports International Holdings SELL Downgrade HOLD
COVR Cover-All Technologies Inc. HOLD Upgrade SELL
CSIQ Canadian Solar SELL Downgrade HOLD
CSL Carlisle Companies HOLD Downgrade BUY
CVC Cablevision Systems SELL Downgrade HOLD
CYN City National BUY Upgrade HOLD
ETN Eaton Corp HOLD Downgrade BUY
FSNM First State Bancorp SELL Downgrade HOLD
HAYN Haynes International HOLD Downgrade BUY
HXL Hexcel Corp HOLD Downgrade BUY
ITP Intertape Polymer Group HOLD Upgrade SELL
MANH Manhattan Associates HOLD Downgrade BUY
OCNF OceanFreight SELL Initiated -
ORA Ormat Technologies HOLD Downgrade BUY
OSG Overseas Shipholding HOLD Downgrade BUY
PWVI PowerVerde Inc. FROZEN Downgrade HOLD
RDS.A Royal Dutch Shell HOLD Downgrade BUY
RNST Renasant Corp. BUY Upgrade HOLD
SCHS School Specialty Inc. HOLD Downgrade BUY
SLW Silver Wheaton HOLD Downgrade BUY
SMHG Sanders Morris Harris Group HOLD Downgrade BUY
SNG Canadian Superior Energy SELL Downgrade HOLD
TBI TrueBlue HOLD Downgrade BUY
UDRL Union Drilling SELL Downgrade HOLD
ULTI Ultimate Software Group 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.

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

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