Citigroup Increases Tyco Electronics Price Target; Reiterates Buy Rating

Tyco Electronics Ltd. TEL reported inline-to-slightly above expectations for Sept Rev/EPS of $3.1b/$0.72 compared to the Street at $3.1b/$0.70, Citigroup reports. Dec sales guidance of $3.05-$3.15b (-3% to flat q/q) is above expectations of $3.05b, and adjusted EPS of $0.66-$0.70 is slightly above the Street at $0.67. “[We are] increasing our Target Price to $41.00 from $40.00 and reiterate our Buy (1H) rating on TEL as we believe valuation is attractive at 11x NTM earnings plus 2% dividend yield as we see potential upside to EPS accretion estimates for the ADCT acquisition closes next qtr (not built into expectation or valuation),” Citigroup writes. Tyco Electronics Ltd. Currently trades at $31.40.