J.P. Morgan Raises Price Target on Tyco International (TYC)

J.P. Morgan is out with a research report this morning, where it reiterates its Overweight rating on Tyco International TYC; it has a $52.00 price target on the stock, up from $50.00. The JPM analysts cited the company's earnings release, which highlighted the potential pent up earnings power at Tyco (~$5) that they believe is underappreciated. The analysts noted that Tyco remains one of a few stocks where investors are not extrapolating positive trends, perhaps because revenue is still relatively weak, or perhaps because the positives are buried in lots of moving parts. Either way, the analysts believe that TYC is close to inflection and as fundamentals continue to turn, they believe momentum will build. As for valuation, the analysts remarked, “Shares trade at a 14% discount to peers, unwarranted for a company still in its trough, in our view. Our end-December 2011 price target is based on ~13.8x our 2012E EPS.”