J.P. Morgan Upgrades Textron To Overweight

In a report published by J.P. Morgan, Textron TXT is upgraded to Overweight. J.P. Morgan said that it is upgrading TXT to OW as fundamental catalysts build in the form of orders in key businesses, and it believes that the last consensus cut for this cycle is in, making valuation/sentiment less of a concern. “We continue to favor late cycle names, per our sector report today, a theme TXT fits well. We see Cessna orders driving multiple expansion into 2012, while late cycle leverage drives above-average earnings growth, making valuation reasonable at ~10x 2013E (~10% discount to peers). Our $30 PT assumes 16x 2012E EPS, or 12x 2013E EPS, versus ~14x/10x currently.” Textron closed yesterday at $26.37.