Friday’s Top Upgrades (and Downgrades): Zillow Inc (Z), National Grid plc (ADR) (NGG)

Zillow Inc (NASDAQ:Z)This series, brought to you by Yahoo! Finance, looks at which upgrades and downgrades make sense, and which ones investors should act on. Today, our headlines include new buy ratings for National Grid plc (ADR) (NYSE:NGG) and Zillow Inc (NASDAQ:Z) . On the other hand, one analyst fears there’s…

No playdate for Children’s Place Retail Stores, Inc.  (NASDAQ:PLCE)
Shares of tyke clothier Children’s Place Retail Stores, Inc.  (NASDAQ:PLCE) are sitting out today’s market rally, dropping 0.5% (and counting) as the rest of the market rises. For this, you can blame the analysts at Goldman Sachs, who have resumed coverage of the stock with a sell rating ahead of Tuesday’s anticipated Q4 earnings release.

According to Goldman, Children’s Place faces “structural pressure … from an increasingly competitive and price sensitive children’s apparel category.” More generally, the analyst also worries about the “inherently high execution and fashion risk” of clothing retail as an industry. In other words, consumers are fickle as a rule. And since there are any number of places out there where they can buy kids’ clothes — and buy them cheap — trying to make a consistent profit in this business is no easy task.

And not just for Children’s Place, either. Sad to say, but with the shares selling for north of $17 apiece today and Children’s Place pegged for only 8% long-term earnings growth, it’s going to be even harder for investors to make a profit on this stock. In short, Goldman’s downgrade announcement may not be welcome news for shareholders — but it’s the right call.

No weeping Zillow Inc (NASDAQ:Z)
Happier news (of a sort) greets investors in online housing voyeur Zillow Inc (NASDAQ:Z) today, as the stock wins an initiation at “outperform” from the analysts at RBC Capital. With its growth rate pegged for 30% — three-and-a-half times what Children’s Place is expected to produce — RBC sees Zillow Inc (NASDAQ:Z) outperforming the market handily.

Unfortunately, so does everyone else. That’s why Zillow shares have already run up 65% in price over the past year. And that’s why Zillow Inc (NASDAQ:Z) shares are now too expensive to buy.