FBR Capital Markets Wednesday raised its price target and earnings estimates on diversified conglomerate Tyco International Ltd. (TYC). The brokerage cited company's conservative guidance for fiscal 2010. The price target was raised to $41 from $39 and the 2010 EPS estimate was increased to $2.50 from $2.40. The brokerage maintained its "Outperform" rating on the stock.
Noting the outlook of $2.30-$2.50 as conservative, analyst Deane Dray said his positive thesis on the company is based on its appeal as a "defensive early cycle" and as an attractively valued stock. The analyst said the company on Tuesday had reported solid earnings for the fourth quarter that beat consensus by 7 cents.
The brokerage expects the company to be well above consensus 2010 estimates, as it sees upside from cash redeployment and improving market conditions in the back half of 2010. FBR expects healthy margin improvements at Tyco's ADT segment.
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