TheStreet Ratings Top 10 Rating Changes

NEW YORK ( TheStreet Ratings) -- Every trading day TheStreet Ratings' stock model reviews the investment ratings on around 4,700 U.S. traded stocks for potential upgrades or downgrades based on the latest available financial results and trading activity.

TheStreet Ratings released rating changes on 104 U.S. common stocks for week ending February 3, 2012. 84 stocks were upgraded and 20 stocks were downgraded by our stock model.

Rating Change #10

PerkinElmer Inc ( PKI) has been downgraded by TheStreet Ratings from buy to hold. The company's strengths can be seen in multiple areas, such as its revenue growth, good cash flow from operations and expanding profit margins. However, as a counter to these strengths, we also find weaknesses including deteriorating net income, disappointing return on equity and a generally disappointing performance in the stock itself.

Highlights from the ratings report include:
  • PKI's revenue growth has slightly outpaced the industry average of 7.4%. Since the same quarter one year prior, revenues rose by 14.9%. This growth in revenue does not appear to have trickled down to the company's bottom line, displayed by a decline in earnings per share.
  • Net operating cash flow has significantly increased by 185.33% to $82.53 million when compared to the same quarter last year. In addition, PERKINELMER INC has also vastly surpassed the industry average cash flow growth rate of 12.37%.
  • The current debt-to-equity ratio, 0.51, is low and is below the industry average, implying that there has been successful management of debt levels. Although the company had a strong debt-to-equity ratio, its quick ratio of 0.92 is somewhat weak and could be cause for future problems.
  • The company, on the basis of change in net income from the same quarter one year ago, has significantly underperformed when compared to that of the S&P 500 and the Life Sciences Tools & Services industry. The net income has significantly decreased by 129.3% when compared to the same quarter one year ago, falling from $288.49 million to -$84.64 million.
  • Current return on equity is lower than its ROE from the same quarter one year prior. This is a clear sign of weakness within the company. Compared to other companies in the Life Sciences Tools & Services industry and the overall market, PERKINELMER INC's return on equity significantly trails that of both the industry average and the S&P 500.

PerkinElmer, Inc. provides technology, services, and solutions to the diagnostics, research, environmental and safety, and industrial and laboratory services markets worldwide. The company has a P/E ratio of 23.3, above the average health services industry P/E ratio of 7.4 and above the S&P 500 P/E ratio of 17.7. PerkinElmer has a market cap of $2.7 billion and is part of the health care sector and health services industry. Shares are up 23.4% year to date as of the close of trading on Friday.

You can view the full PerkinElmer Ratings Report or get investment ideas from our investment research center.

Rating Change #9

Expedia Inc ( EXPE) has been downgraded by TheStreet Ratings from buy to hold. The company's strengths can be seen in multiple areas, such as its increase in net income, robust revenue growth and attractive valuation levels. However, as a counter to these strengths, we also find weaknesses including a generally disappointing performance in the stock itself and disappointing return on equity.

Highlights from the ratings report include:
  • The net income growth from the same quarter one year ago has exceeded that of the S&P 500 and greatly outperformed compared to the Internet & Catalog Retail industry average. The net income increased by 18.7% when compared to the same quarter one year prior, going from $176.55 million to $209.53 million.
  • The revenue growth significantly trails the industry average of 51.8%. Since the same quarter one year prior, revenues rose by 15.5%. Growth in the company's revenue appears to have helped boost the earnings per share.
  • EXPEDIA INC has improved earnings per share by 21.0% in the most recent quarter compared to 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, EXPEDIA INC increased its bottom line by earning $2.94 versus $2.06 in the prior year. For the next year, the market is expecting a contraction of 8.7% in earnings ($2.69 versus $2.94).
  • 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 to other companies in the Internet & Catalog Retail industry and the overall market on the basis of return on equity, EXPEDIA INC has underperformed in comparison with the industry average, but has exceeded that of the S&P 500.
  • EXPE's stock share price has done very poorly compared to where it was a year ago: Despite any rallies, the net result is that it is down by 35.97%, 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. Naturally, the overall market trend is bound to be a significant factor. However, in one sense, the stock's sharp decline last year is a positive for future investors, making it cheaper (in proportion to its earnings over the past year) than most other stocks in its industry. But due to other concerns, we feel the stock is still not a good buy right now.

Expedia, Inc., together with its subsidiaries, operates as an online travel company in the United States and internationally. The company has a P/E ratio of 17.1, above the average leisure industry P/E ratio of 9.3 and below the S&P 500 P/E ratio of 17.7. Expedia has a market cap of $3.79 billion and is part of the services sector and leisure industry. Shares are up 14.8% year to date as of the close of trading on Tuesday.

You can view the full Expedia Ratings Report or get investment ideas from our investment research center.

Rating Change #8

Diamond Offshore Drilling Inc ( DO) has been downgraded by TheStreet Ratings from buy to hold. The company's strengths can be seen in multiple areas, such as its largely solid financial position with reasonable debt levels by most measures, expanding profit margins and notable return on equity. However, as a counter to these strengths, we also find weaknesses including unimpressive growth in net income, a generally disappointing performance in the stock itself and feeble growth in the company's earnings per share.

Highlights from the ratings report include:
  • The current debt-to-equity ratio, 0.35, is low and is below the industry average, implying that there has been successful management of debt levels. Along with this, the company maintains a quick ratio of 4.21, which clearly demonstrates the ability to cover short-term cash needs.
  • 43.80% is the gross profit margin for DIAMOND OFFSHRE DRILLING INC which we consider to be strong. Regardless of DO's high profit margin, it has managed to decrease from the same period last year. Despite the mixed results of the gross profit margin, DO's net profit margin of 25.20% significantly outperformed against the industry.
  • DO, with its decline in revenue, underperformed when compared the industry average of 15.6%. Since the same quarter one year prior, revenues fell by 11.0%. Weakness in the company's revenue seems to have hurt the bottom line, decreasing earnings per share.
  • Reflecting the weaknesses we have cited, including the decline in the company's earnings per share, DO has underperformed the S&P 500 Index, declining 12.54% from its price level of one year ago. The fact that the stock is now selling for less than others in its industry in relation to its current earnings is not reason enough to justify a buy rating at this time.
  • The company, on the basis of change in net income from the same quarter one year ago, has significantly underperformed when compared to that of the S&P 500 and the Energy Equipment & Services industry. The net income has decreased by 22.0% when compared to the same quarter one year ago, dropping from $241.69 million to $188.49 million.

Diamond Offshore Drilling, Inc., together with its subsidiaries, operates as an offshore oil and gas drilling contractor worldwide. The company has a P/E ratio of 8.6, above the average energy industry P/E ratio of 8.4 and below the S&P 500 P/E ratio of 17.7. Shares are up 14.5% year to date as of the close of trading on Friday.

Rating Change #7

Entergy Corp ( ETR) has been downgraded by TheStreet Ratings from buy to hold. The company's strengths can be seen in multiple areas, such as its reasonable valuation levels, good cash flow from operations and notable return on equity. However, as a counter to these strengths, we also find weaknesses including unimpressive growth in net income, generally poor debt management and poor profit margins.

Highlights from the ratings report include:
  • Net operating cash flow has increased to $999.06 million or 31.28% when compared to the same quarter last year. The firm also exceeded the industry average cash flow growth rate of -10.86%.
  • The return on equity has improved slightly when compared to the same quarter one year prior. This can be construed as a modest strength in the organization. Compared to other companies in the Electric Utilities industry and the overall market on the basis of return on equity, ENTERGY CORP has outperformed in comparison with the industry average, but has underperformed when compared to that of the S&P 500.
  • The company, on the basis of change in net income from the same quarter one year ago, has significantly underperformed when compared to that of the S&P 500 and the Electric Utilities industry. The net income has significantly decreased by 31.4% when compared to the same quarter one year ago, falling from $233.31 million to $160.03 million.
  • The debt-to-equity ratio of 1.34 is relatively high when compared with the industry average, suggesting a need for better debt level management. Along with this, the company manages to maintain a quick ratio of 0.29, which clearly demonstrates the inability to cover short-term cash needs.

Entergy Corporation, together with its subsidiaries, engages in electric power production and retail electric distribution operations in the United States. The company operates in two segments, Utility and Entergy Wholesale Commodities. The company has a P/E ratio of 9.1, above the average utilities industry P/E ratio of 8.7 and below the S&P 500 P/E ratio of 17.7. Entergy has a market cap of $12.23 billion and is part of the utilities sector and utilities industry. Shares are down 5% year to date as of the close of trading on Thursday.

You can view the full Entergy Ratings Report or get investment ideas from our investment research center.

Rating Change #6

Kyocera Corporation ( KYO) has been downgraded by TheStreet Ratings from buy to hold. The company's strengths can be seen in multiple areas, such as its largely solid financial position with reasonable debt levels by most measures, attractive valuation levels and good cash flow from operations. However, as a counter to these strengths, we also find weaknesses including disappointing return on equity, poor profit margins and a generally disappointing performance in the stock itself.

Highlights from the ratings report include:
  • KYO's debt-to-equity ratio is very low at 0.02 and is currently below that of the industry average, implying that there has been very successful management of debt levels. Along with this, the company maintains a quick ratio of 2.54, which clearly demonstrates the ability to cover short-term cash needs.
  • The revenue fell significantly faster than the industry average of 42.4%. Since the same quarter one year prior, revenues fell by 10.5%. Weakness in the company's revenue seems to have hurt the bottom line, decreasing earnings per share.
  • The gross profit margin for KYOCERA CORP is currently lower than what is desirable, coming in at 26.10%. It has decreased from the same quarter the previous year. Regardless of the weak results of the gross profit margin, the net profit margin of 9.00% is above that of the industry average.
  • 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. When compared to other companies in the Electronic Equipment, Instruments & Components industry and the overall market, KYOCERA CORP's return on equity is below that of both the industry average and the S&P 500.

Kyocera Corporation develops, produces, and distributes ceramic, semiconductor, and electronic products for the information and communications markets, and environment and energy markets worldwide. The company has a P/E ratio of 52.7, above the average electronics industry P/E ratio of 11.8 and above the S&P 500 P/E ratio of 17.7. Kyocera has a market cap of $15.46 billion and is part of the technology sector and electronics industry. Shares are up 2.4% year to date as of the close of trading on Tuesday.

You can view the full Kyocera Ratings Report or get investment ideas from our investment research center.

Rating Change #5

Vertex Pharmaceuticals ( VRTX) has been upgraded by TheStreet Ratings from sell to hold. The company's strengths 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.

Highlights from the ratings report include:
  • VRTX's very impressive revenue growth greatly exceeded the industry average of 2.8%. Since the same quarter one year prior, revenues leaped by 759.7%. Growth in the company's revenue appears to have helped boost the earnings per share.
  • VERTEX PHARMACEUTICALS INC reported significant earnings per share improvement in the most recent quarter compared to the same quarter a year ago. The company has demonstrated a pattern of positive earnings per share growth over the past two years. We feel that this trend should continue. This trend suggests that the performance of the business is improving. During the past fiscal year, VERTEX PHARMACEUTICALS INC turned its bottom line around by earning $0.04 versus -$3.77 in the prior year. This year, the market expects an improvement in earnings ($3.68 versus $0.04).
  • Despite currently having a low debt-to-equity ratio of 0.51, it is higher than that of the industry average, inferring that management of debt levels may need to be evaluated further.
  • The company's current return on equity greatly increased when compared to its ROE from the same quarter one year prior. This is a signal of significant strength within the corporation. Compared to other companies in the Biotechnology industry and the overall market, VERTEX PHARMACEUTICALS INC's return on equity significantly trails that of both the industry average and the S&P 500.
  • After a year of stock price fluctuations, the net result is that VRTX's price has not changed very much. Although its weak earnings growth may have played a role in this flat result, don't lose sight of the fact that the performance of the overall market, as measured by the S&P 500 Index, was essentially similar. Looking ahead, other than the push or pull of the broad market, we do not see anything in the company's numbers that may help reverse the decline experienced over the past 12 months. Despite the past decline, the stock is still selling for more than most others in its industry.

Vertex Pharmaceuticals Incorporated engages in the discovery, development, and commercialization of small molecule drugs for the treatment of serious diseases worldwide. Vertex has a market cap of $7.3 billion and is part of the health care sector and drugs industry. Shares are up 15.6% year to date as of the close of trading on Friday.

You can view the full Vertex Ratings Report or get investment ideas from our investment research center.

Rating Change #4

Seagate Technology PLC ( STX) has been upgraded by TheStreet Ratings from hold to buy. The company's strengths can be seen in multiple areas, such as its solid stock price performance, increase in net income, revenue growth, attractive valuation levels and expanding profit margins. We feel these strengths outweigh the fact that the company has had somewhat disappointing return on equity.

Highlights from the ratings report include:
  • The net income growth from the same quarter one year ago has significantly exceeded that of the S&P 500 and the Computers & Peripherals industry. The net income increased by 275.3% when compared to the same quarter one year prior, rising from $150.00 million to $563.00 million.
  • The revenue growth significantly trails the industry average of 72.8%. Since the same quarter one year prior, revenues rose by 17.5%. Growth in the company's revenue appears to have helped boost the earnings per share.
  • Powered by its strong earnings growth of 312.90% and other important driving factors, this stock has surged by 51.00% over the past year, outperforming the rise in the S&P 500 Index during the same period. Regarding the stock's future course, although almost any stock can fall in a broad market decline, STX should continue to move higher despite the fact that it has already enjoyed a very nice gain in the past year.
  • 37.50% is the gross profit margin for SEAGATE TECHNOLOGY PLC which we consider to be strong. It has increased significantly from the same period last year. Despite the strong results of the gross profit margin, STX's net profit margin of 17.60% significantly trails the industry average.

Seagate Technology Public Limited Company designs, manufactures, markets, and sells hard disk drives for enterprise, client compute, and client non-compute market applications worldwide. The company has a P/E ratio of 19, above the average computer hardware industry P/E ratio of 18 and above the S&P 500 P/E ratio of 17.7. Seagate Technology has a market cap of $8.29 billion and is part of the technology sector and computer hardware industry. Shares are up 28.9% year to date as of the close of trading on Wednesday.

You can view the full Seagate Technology Ratings Report or get investment ideas from our investment research center.

Rating Change #3

Allstate Corp ( ALL) has been upgraded by TheStreet Ratings from hold to buy. 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, attractive valuation levels, increase in net income and growth in earnings per share. We feel these strengths outweigh the fact that the company has had somewhat disappointing return on equity.

Highlights from the ratings report include:
  • ALL's revenue growth has slightly outpaced the industry average of 7.0%. Since the same quarter one year prior, revenues slightly increased by 2.4%. Growth in the company's revenue appears to have helped boost the earnings per share.
  • The current debt-to-equity ratio, 0.32, is low and is below the industry average, implying that there has been successful management of debt levels.
  • The net income growth from the same quarter one year ago has significantly exceeded that of the S&P 500 and the Insurance industry. The net income increased by 144.6% when compared to the same quarter one year prior, rising from $296.00 million to $724.00 million.
  • ALLSTATE CORP reported significant earnings per share improvement in the most recent quarter compared to the same quarter a year ago. This company has reported somewhat volatile earnings recently. But, we feel it is poised for EPS growth in the coming year. During the past fiscal year, ALLSTATE CORP reported lower earnings of $1.53 versus $1.72 in the prior year. This year, the market expects an improvement in earnings ($3.73 versus $1.53).

The Allstate Corporation, through its subsidiaries, engages in the personal property and casualty insurance, life insurance, retirement, and investment products businesses primarily in the United States. The company has a P/E ratio of 43.1, below the average insurance industry P/E ratio of 45.2 and above the S&P 500 P/E ratio of 17.7. Allstate has a market cap of $14.84 billion and is part of the financial sector and insurance industry. Shares are up 6.9% year to date as of the close of trading on Thursday.

You can view the full Allstate Ratings Report or get investment ideas from our investment research center.

Rating Change #2

ProLogis Inc ( PLD) has been upgraded by TheStreet Ratings from sell to hold. The company's strengths can be seen in multiple areas, such as its robust revenue growth, largely solid financial position with reasonable debt levels by most measures and increase in net income. However, as a counter to these strengths, we also find weaknesses including disappointing return on equity, weak operating cash flow and a generally disappointing performance in the stock itself.

Highlights from the ratings report include:
  • PLD's very impressive revenue growth greatly exceeded the industry average of 18.5%. Since the same quarter one year prior, revenues leaped by 123.8%. Growth in the company's revenue appears to have helped boost the earnings per share.
  • The debt-to-equity ratio is somewhat low, currently at 0.87, and is less than that of the industry average, implying that there has been a relatively successful effort in the management of debt levels.
  • PROLOGIS INC reported significant earnings per share improvement in the most recent quarter compared to the same quarter a year ago. This company has reported somewhat volatile earnings recently. But, we feel it is poised for EPS growth in the coming year. During the past fiscal year, PROLOGIS INC reported poor results of -$6.79 versus -$1.19 in the prior year. This year, the market expects an improvement in earnings (-$0.19 versus -$6.79).
  • 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 to other companies in the Real Estate Investment Trusts (REITs) industry and the overall market, PROLOGIS INC's return on equity significantly trails that of both the industry average and the S&P 500.
  • Net operating cash flow has declined marginally to $122.17 million or 3.05% when compared to the same quarter last year. In addition, when comparing the cash generation rate to the industry average, the firm's growth is significantly lower.

Prologis Inc. is an independent equity real estate investment trust. It invests in the real estate markets across the globe. The firm engages in the ownership, development, management, and leasing of industrial distribution and retail properties. The company has a P/E ratio of 85.6, above the S&P 500 P/E ratio of 17.7. ProLogis has a market cap of $14.75 billion and is part of the financial sector and real estate industry. Shares are up 10.5% year to date as of the close of trading on Tuesday.

You can view the full ProLogis Ratings Report or get investment ideas from our investment research center.

Rating Change #1

MetLife Inc ( MET) has been upgraded by TheStreet Ratings from hold to buy. The company's strengths can be seen in multiple areas, such as its robust revenue growth, impressive record of earnings per share growth, compelling growth in net income, attractive valuation levels and good cash flow from operations. We feel these strengths outweigh the fact that the company has had lackluster performance in the stock itself.

Highlights from the ratings report include:
  • MET's very impressive revenue growth greatly exceeded the industry average of 7.0%. Since the same quarter one year prior, revenues leaped by 65.8%. Growth in the company's revenue appears to have helped boost the earnings per share.
  • METLIFE INC reported significant earnings per share improvement in the most recent quarter compared to the same quarter a year ago. The company has demonstrated a pattern of positive earnings per share growth over the past year. We feel that this trend should continue. During the past fiscal year, METLIFE INC turned its bottom line around by earning $3.17 versus -$2.94 in the prior year. This year, the market expects an improvement in earnings ($4.92 versus $3.17).
  • The net income growth from the same quarter one year ago has significantly exceeded that of the S&P 500 and the Insurance industry. The net income increased by 1033.5% when compared to the same quarter one year prior, rising from $316.00 million to $3,582.00 million.
  • Net operating cash flow has significantly increased by 77.62% to $2,247.00 million when compared to the same quarter last year. In addition, METLIFE INC has also vastly surpassed the industry average cash flow growth rate of -13.95%.

MetLife, Inc., through its subsidiaries, provides insurance, annuities, and employee benefit programs primarily in the United States, Japan, Latin America, the Asia Pacific, Europe, and the Middle East. The company has a P/E ratio of seven, below the average insurance industry P/E ratio of 7.2 and below the S&P 500 P/E ratio of 17.7. MetLife has a market cap of $39.04 billion and is part of the financial sector and insurance industry. Shares are up 16.7% year to date as of the close of trading on Friday.

You can view the full MetLife Ratings Report or get investment ideas from our investment research center.

-- Reported by Kevin Baker in Jupiter, Fla.

For additional Investment Research check out our Ratings Research Center.

For all other upgrades and downgrades made by TheStreet Ratings Model today check out our upgrades and downgrades list.
Kevin Baker became the senior financial analyst for TheStreet Ratings upon the August 2006 acquisition of Weiss Ratings by TheStreet.com, covering equity and mutual fund ratings. He joined the Weiss Group in 1997 as a banking and brokerage analyst. In 1999, he created the Weiss Group's first ratings to gauge the level of risk in U.S. equities. Baker received a B.S. degree in management from Rensselaer Polytechnic Institute and an M.B.A. with a finance specialization from Nova Southeastern University.