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 54 U.S. common stocks for week ending September 7, 2012. 30 stocks were upgraded and 24 stocks were downgraded by our stock model.

Rating Change #10

Guess Inc ( GES) 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, reasonable valuation levels and expanding profit margins. However, as a counter to these strengths, we also find weaknesses including feeble growth in the company's earnings per share, deteriorating net income and weak operating cash flow.

Highlights from the ratings report include:
  • GES's debt-to-equity ratio is very low at 0.01 and is currently below that of the industry average, implying that there has been very successful management of debt levels. To add to this, GES has a quick ratio of 1.59, which demonstrates the ability of the company to cover short-term liquidity needs.
  • 40.70% is the gross profit margin for GUESS INC which we consider to be strong. Regardless of GES's high profit margin, it has managed to decrease from the same period last year. Despite the mixed results of the gross profit margin, the net profit margin of 7.10% trails the industry average.
  • 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 Specialty Retail industry. The net income has significantly decreased by 29.3% when compared to the same quarter one year ago, falling from $60.66 million to $42.90 million.
  • Net operating cash flow has significantly decreased to $8.00 million or 80.26% when compared to the same quarter last year. In addition, when comparing to the industry average, the firm's growth rate is much lower.

Guess , Inc. designs, markets, distributes, and licenses lifestyle collections of contemporary apparel and accessories for men, women, and children that reflect the American lifestyle and European fashion sensibilities. The company has a P/E ratio of 11.1, above the average retail industry P/E ratio of 10.3 and below the S&P 500 P/E ratio of 17.7. Guess has a market cap of $2.34 billion and is part of the services sector and retail industry. Shares are down 12% year to date as of the close of trading on Wednesday.

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

Rating Change #9

Advanced Micro Devices ( AMD) has been downgraded by TheStreet Ratings from hold to sell. The company's weaknesses can be seen in multiple areas, such as its deteriorating net income, generally high debt management risk, disappointing return on equity, weak operating cash flow and generally disappointing historical performance in the stock itself.

Highlights from the ratings report include:
  • 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 Semiconductors & Semiconductor Equipment industry. The net income has significantly decreased by 39.3% when compared to the same quarter one year ago, falling from $61.00 million to $37.00 million.
  • Currently the debt-to-equity ratio of 1.81 is quite high overall and when compared to the industry average, suggesting that the current management of debt levels should be re-evaluated. Along with the unfavorable debt-to-equity ratio, AMD maintains a poor quick ratio of 0.99, which illustrates the inability to avoid short-term cash problems.
  • Return on equity has greatly decreased when compared to its ROE from the same quarter one year prior. This is a signal of major weakness within the corporation. Compared to other companies in the Semiconductors & Semiconductor Equipment industry and the overall market, ADVANCED MICRO DEVICES's return on equity significantly trails that of both the industry average and the S&P 500.
  • Net operating cash flow has significantly decreased to $81.00 million or 53.44% when compared to the same quarter last year. In addition, when comparing to the industry average, the firm's growth rate is much lower.
  • Despite any intermediate fluctuations, we have only bad news to report on this stock's performance over the last year: it has tumbled by 41.63%, worse than the S&P 500's performance. Consistent with the plunge in the stock price, the company's earnings per share are down 37.50% compared to the year-earlier 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.

Advanced Micro Devices, Inc. operates as a semiconductor company worldwide. The company designs, develops, and sells microprocessor products, such as central processing unit (CPU) and accelerated processing unit (APU) for servers, desktop personal computers (PCs), and mobile devices. Advanced Micro Devices has a market cap of $2.48 billion and is part of the technology sector and electronics industry. Shares are down 35% year to date as of the close of trading on Friday.

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

Rating Change #8

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

Highlights from the ratings report include:
  • Net operating cash flow has increased to $365.80 million or 11.11% when compared to the same quarter last year. The firm also exceeded the industry average cash flow growth rate of -5.46%.
  • The gross profit margin for QEP RESOURCES INC is rather high; currently it is at 50.70%. It has increased from the same quarter the previous year. Regardless of the strong results of the gross profit margin, the net profit margin of -0.10% trails the industry average.
  • The revenue fell significantly faster than the industry average of 2.7%. Since the same quarter one year prior, revenues fell by 38.2%. 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. In comparison to the other companies in the Oil, Gas & Consumable Fuels industry and the overall market, QEP RESOURCES INC's return on equity is significantly below that of the industry average and is below that of the S&P 500.
  • The share price of QEP RESOURCES INC has not done very well: it is down 15.75% and has underperformed the S&P 500, in part reflecting the company's sharply declining earnings per share when compared to the year-earlier quarter. Looking ahead, we do not see anything in this company's numbers that would change the one-year trend. It was down over the last twelve months; and it could be down again in the next twelve. Naturally, a bull or bear market could sway the movement of this stock.

QEP Resources, Inc., through its subsidiaries, operates as an independent oil and natural gas exploration and production company. The company has a P/E ratio of 19.9, equal to the average energy industry P/E ratio and above the S&P 500 P/E ratio of 17.7. QEP has a market cap of $5.1 billion and is part of the basic materials sector and energy industry. Shares are down 2.1% year to date as of the close of trading on Wednesday.

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

Rating Change #7

Hartford Financial Services Group ( HIG) 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, reasonable valuation levels and increase in stock price during the past year. However, as a counter to these strengths, we also find weaknesses including deteriorating net income, disappointing return on equity and weak operating cash flow.

Highlights from the ratings report include:
  • The current debt-to-equity ratio, 0.34, is low and is below the industry average, implying that there has been successful management of debt levels.
  • HIG, with its decline in revenue, underperformed when compared the industry average of 0.7%. Since the same quarter one year prior, revenues fell by 15.4%. Weakness in the company's revenue seems to have hurt the bottom line, decreasing earnings per share.
  • 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 Insurance industry. The net income has significantly decreased by 406.1% when compared to the same quarter one year ago, falling from $33.00 million to -$101.00 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 Insurance industry and the overall market on the basis of return on equity, HARTFORD FINANCIAL SERVICES underperformed against that of the industry average and is significantly less than that of the S&P 500.

The Hartford Financial Services Group, Inc., together with its subsidiaries, provides insurance and financial services primarily in the United States and Japan. The company has a P/E ratio of 99.6, above the average insurance industry P/E ratio of 52.7 and above the S&P 500 P/E ratio of 17.7. Hartford Financial Services Group has a market cap of $7.81 billion and is part of the financial sector and insurance industry. Shares are up 10.3% year to date as of the close of trading on Wednesday.

You can view the full Hartford Financial Services Group Ratings Report or get investment ideas from our investment research center.

Rating Change #6

Southwestern Energy Company ( SWN) has been downgraded by TheStreet Ratings from buy to hold. Among the primary strengths of the company is its expanding profit margins over time. At the same time, however, we also find weaknesses including deteriorating net income, disappointing return on equity and weak operating cash flow.

Highlights from the ratings report include:
  • The gross profit margin for SOUTHWESTERN ENERGY CO is rather high; currently it is at 59.40%. It has increased from the same quarter the previous year. Regardless of the strong results of the gross profit margin, the net profit margin of -81.40% is in-line with the industry average.
  • SWN, with its decline in revenue, underperformed when compared the industry average of 2.7%. Since the same quarter one year prior, revenues fell by 21.6%. Weakness in the company's revenue seems to have hurt the bottom line, decreasing earnings per share.
  • SOUTHWESTERN ENERGY CO has exprienced a steep decline in earnings per share in the most recent quarter in comparison to its performance from the same quarter a year ago. This company has reported somewhat volatile earnings recently. We feel it is likely to report a decline in earnings in the coming year. During the past fiscal year, SOUTHWESTERN ENERGY CO increased its bottom line by earning $1.82 versus $1.73 in the prior year. For the next year, the market is expecting a contraction of 31.3% in earnings ($1.25 versus $1.82).
  • Return on equity has greatly decreased when compared to its ROE from the same quarter one year prior. This is a signal of major weakness within the corporation. Compared to other companies in the Oil, Gas & Consumable Fuels industry and the overall market, SOUTHWESTERN ENERGY CO's return on equity significantly trails that of both the industry average and 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 Oil, Gas & Consumable Fuels industry. The net income has significantly decreased by 391.5% when compared to the same quarter one year ago, falling from $167.45 million to -$488.10 million.

Southwestern Energy Company, an independent energy company, engages in the exploration, development, and production of natural gas and crude oil in the United States. The company operates through two segments, Exploration and Production, and Midstream Services. Southwestern Energy has a market cap of $10.87 billion and is part of the basic materials sector and energy industry. Shares are down 2.5% year to date as of the close of trading on Wednesday.

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

Rating Change #5

Brazilian Distribution Company ( CBD) has been upgraded by TheStreet Ratings from hold to buy. The company's strengths can be seen in multiple areas, such as its increase in net income, growth in earnings per share, notable return on equity and increase in stock price during the past year. We feel these strengths outweigh the fact that the company shows weak operating cash flow.

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 Food & Staples Retailing industry. The net income increased by 90.4% when compared to the same quarter one year prior, rising from $61.99 million to $118.05 million.
  • CIA BRASILEIRA DE DISTRIB 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, CIA BRASILEIRA DE DISTRIB reported lower earnings of $1.54 versus $1.73 in the prior year. This year, the market expects an improvement in earnings ($2.10 versus $1.54).
  • The revenue fell significantly faster than the industry average of 14.7%. Since the same quarter one year prior, revenues fell by 28.7%. The declining revenue has not hurt the company's bottom line, with increasing earnings per share.
  • 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. When compared to other companies in the Food & Staples Retailing industry and the overall market, CIA BRASILEIRA DE DISTRIB's return on equity is below that of both the industry average and the S&P 500.
  • Compared to where it was 12 months ago, the stock is up, but it has so far lagged the appreciation in the S&P 500. Looking ahead, the stock's rise over the last year has already helped drive it to a level which is relatively expensive compared to the rest of its industry. We feel, however, that the other strengths this company displays justify these higher price levels.

Companhia Brasileira de Distribuic o engages in the retail of food and non-food products to individual consumers through its chain of hypermarkets, supermarkets, specialized and department stores, and the Internet. The company has a P/E ratio of 48.5, above the average retail industry P/E ratio of 19.2 and above the S&P 500 P/E ratio of 17.7. Brazilian Distribution has a market cap of $11.28 billion and is part of the services sector and retail industry. Shares are up 17.7% year to date as of the close of trading on Wednesday.

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

Rating Change #4

Eldorado Gold Corp ( EGO) has been upgraded by TheStreet Ratings from hold to buy. The company's strengths can be seen in multiple areas, such as its largely solid financial position with reasonable debt levels by most measures, reasonable valuation levels and expanding profit margins. We feel these strengths outweigh the fact that the company has had lackluster performance in the stock itself.

Highlights from the ratings report include:
  • EGO'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.
  • The gross profit margin for ELDORADO GOLD CORP is rather high; currently it is at 61.30%. Regardless of EGO's high profit margin, it has managed to decrease from the same period last year. Despite the mixed results of the gross profit margin, EGO's net profit margin of 19.10% compares favorably to the industry average.
  • Despite the weak revenue results, EGO has outperformed against the industry average of 14.1%. Since the same quarter one year prior, revenues slightly dropped by 3.3%. The declining revenue appears to have seeped down to the company's bottom line, decreasing earnings per share.
  • ELDORADO GOLD CORP's earnings per share declined by 50.0% in the most recent quarter compared to the same quarter a year ago. This company has not demonstrated a clear trend in earnings over the past two years, making it difficult to accurately predict earnings for the coming year. During the past fiscal year, ELDORADO GOLD CORP increased its bottom line by earning $0.59 versus $0.38 in the prior year.

Eldorado Gold Corporation, together with its subsidiaries, engages in the exploration, development, mining, and production of gold properties in Brazil, China, Greece, and Turkey. The company has a P/E ratio of 26.1, above the average metals & mining industry P/E ratio of 25.6 and above the S&P 500 P/E ratio of 17.7. Eldorado has a market cap of $9.66 billion and is part of the basic materials sector and metals & mining industry. Shares are up 0.5% year to date as of the close of trading on Friday.

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

Rating Change #3

Limited Brands Inc ( LTD) has been upgraded by TheStreet Ratings from hold to buy. The company's strengths can be seen in multiple areas, such as its good cash flow from operations, expanding profit margins and solid stock price performance. We feel these strengths outweigh the fact that the company has had sub par growth in net income.

Highlights from the ratings report include:
  • Net operating cash flow has significantly increased by 60.99% to $388.00 million when compared to the same quarter last year. In addition, LIMITED BRANDS INC has also vastly surpassed the industry average cash flow growth rate of -23.95%.
  • 43.30% is the gross profit margin for LIMITED BRANDS INC which we consider to be strong. It has increased from the same quarter the previous year. Regardless of the strong results of the gross profit margin, the net profit margin of 6.00% trails the industry average.
  • Compared to its closing price of one year ago, LTD's share price has jumped by 35.17%, exceeding the performance of the broader market during that same time frame. Looking ahead, the stock's sharp rise over the last year has already helped drive it to a level which is relatively expensive compared to the rest of its industry. We feel, however, that other strengths this company displays justify these higher price levels.
  • LIMITED BRANDS INC's earnings per share declined by 32.9% 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, LIMITED BRANDS INC increased its bottom line by earning $2.71 versus $2.42 in the prior year. This year, the market expects an improvement in earnings ($2.85 versus $2.71).
  • LTD, with its decline in revenue, underperformed when compared the industry average of 10.9%. Since the same quarter one year prior, revenues slightly dropped by 2.4%. Weakness in the company's revenue seems to have hurt the bottom line, decreasing earnings per share.

Limited Brands, Inc. operates as a specialty retailer of women's intimate and other apparel, beauty, and personal care products and accessories primarily in the United States and Canada. The company has a P/E ratio of 20.5, equal to the average retail industry P/E ratio and above the S&P 500 P/E ratio of 17.7. Limited has a market cap of $14.15 billion and is part of the services sector and retail industry. Shares are up 20.1% year to date as of the close of trading on Wednesday.

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

Rating Change #2

Prudential Financial Inc ( PRU) 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, increase in stock price during the past year, compelling growth in net income, attractive valuation levels and good cash flow from operations. We feel these strengths outweigh the fact that the company shows low profit margins.

Highlights from the ratings report include:
  • The revenue growth greatly exceeded the industry average of 0.7%. Since the same quarter one year prior, revenues rose by 32.4%. Growth in the company's revenue appears to have helped boost the earnings per share.
  • Compared to where it was a year ago today, the stock is now trading at a higher level, reflecting both the market's overall trend during that period and the fact that the company's earnings growth has been robust. Turning our attention to the future direction of the stock, it goes without saying that even the best stocks can fall in an overall down market. However, in any other environment, this stock still has good upside potential despite the fact that it has already risen in the past year.
  • 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 178.6% when compared to the same quarter one year prior, rising from $789.00 million to $2,198.00 million.
  • Net operating cash flow has significantly increased by 79.03% to $5,269.00 million when compared to the same quarter last year. In addition, PRUDENTIAL FINANCIAL INC has also vastly surpassed the industry average cash flow growth rate of -25.02%.

Prudential Financial, Inc., through its subsidiaries, provides various financial products and services, including life insurance, annuities, retirement-related services, mutual funds, and investment management services in the United States, Asia, Europe, and Latin America. The company has a P/E ratio of 7.7, below the average insurance industry P/E ratio of 7.9 and below the S&P 500 P/E ratio of 17.7. Prudential Financial has a market cap of $25.29 billion and is part of the financial sector and insurance industry. Shares are up 8.8% year to date as of the close of trading on Wednesday.

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

Rating Change #1

Citigroup Inc ( C) has been upgraded by TheStreet Ratings from hold to buy. The company's strengths can be seen in multiple areas, such as its attractive valuation levels, increase in stock price during the past year and notable return on equity. We feel these strengths outweigh the fact that the company has had sub par growth in net income.

Highlights from the ratings report include:
  • Compared to where it was 12 months ago, the stock is up, but it has so far lagged the appreciation in the S&P 500. Looking ahead, unless broad bear market conditions prevail, we still see more upside potential for this stock, despite the fact that it has already risen over the past year.
  • CITIGROUP INC's earnings per share declined by 11.2% 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, CITIGROUP INC increased its bottom line by earning $3.61 versus $3.50 in the prior year. This year, the market expects an improvement in earnings ($4.12 versus $3.61).
  • Regardless of the drop in revenue, the company managed to outperform against the industry average of 19.3%. Since the same quarter one year prior, revenues slightly dropped by 9.4%. Weakness in the company's revenue seems to have hurt the bottom line, decreasing earnings per share.
  • 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. In comparison to the other companies in the Diversified Financial Services industry and the overall market, CITIGROUP INC's return on equity is significantly below that of the industry average and is below that of the S&P 500.

Citigroup, Inc., a diversified financial services holding company, provides a range of financial products and services to consumers, corporations, governments, and institutions worldwide. The company operates through two segments, Citicorp and Citi Holdings. The company has a P/E ratio of 8.6, equal to the average banking industry P/E ratio and below the S&P 500 P/E ratio of 17.7. Citigroup has a market cap of $87.3 billion and is part of the financial sector and banking industry. Shares are up 18.3% year to date as of the close of trading on Friday.

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

-- Reported by Kevin Baker in Palm Beach Gardens, 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.

Editor's Note: TheStreet ratings do not represent the views of TheStreet's staff or its contributors. Ratings are established by computer based on metrics for performance (which includes growth, stock performance, efficiency and valuation) and risk (volatility and solvency). Companies with poor cash flow or high debt levels tend to earn lower ratings in our model
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.

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