Credit Suisse Raises TEL Target To $43

Credit Suisse reports that it believes Tyco Electronics Ltd. New Switz TEL FQ2 (Mar) guidance will prove conservative. “TEL beat FQ1 consensus but guided FQ2 EPS below consensus owing to (1) input cost pressure, and (2) inventory reductions, both of which will hurt margins,” Credit Suisse writes. “We squeeze our model to get to management's guided range, so expect upside to FQ3 and FY11, just as ADCT revenue & cost synergies start to roll in. We take C11 EPS from $3.18 to $3.21 and C12 from $3.58 to $3.59. We take our TP from $38 to $43 based on 12x our C12 est. With ~19% upside to our TP, we stay Outperform.” Tyco Electronics closed Thursday at $36.02.