Sterne Agee Reiterates Buy Rating on Tyco International (TYC)

Sterne Agee is out with a research report this morning, where it reiterates its Buy rating on Tyco International Ltd. (NYSE: TYC); it has a $41.00 price target on the stock.

The SA analysts cited the company’s most recent earnings report, which beat both their own and the Street expectations. Notably, the analysts reduced their FY 2010 EPS estimate by $0.10 to “reflect $0.05 from reclassification of Waterworks as discontinuing ops and about $0.05 from higher taxes in 4QFY10.”

They also noted that TYC’s portfolio is now filled with highly leveraged, global businesses; they believe investor interest is on the rise because of this.

The Sterne Agee analysts said, “Our new $41 price target (down from $42) assumes that TYC trades at a 15% premium to FactSet's 2011 S&P 500 estimated P/E multiple of 11.4X based on our unchanged FY2011 EPS forecast of $3.10. FactSet currently estimates 2011E S&P 500 earnings of $96.56.”