Morgan Stanley Removes Tyco From Best Ideas List; Shares Remain Attractively Valued

Tyco International TYC is being removed from the MS Best Ideas List in conjunction with the addition to the list of Honeywell HON. TYC has been on the Best Ideas List since August 2010. Morgan Stanley still views TYC as one of its top picks in the industrials space and thinks shares of TYC are still attractively valued. Morgan Stanley remains Overweight with a price target of $52. However, it finds HON a bit more attractive here with more near term operating catalysts. In a recent note, Morgan Stanley outlined several catalysts, which include accretion from Broadview far above expectations; likely return of stock to S&P 500 index; share buy back above Morgan Stanley's estimates and potential to re-lever B/S; further restructuring opportunities; asset sales - most notably Electrical & Metal Products and European security assets. Morgan Stanley adds that multiple catalysts still do remain including: accretion from Broadview acq far above expectations; further cost restructuring; further asset sales provide additional cash and improve portfolio mix. Morgan Stanley has an Overweight rating and $52 PT on TYC TYC closed Friday at $44.79