UPDATE: Morgan Stanley Upgrades Tupperware Brands to Overweight on Growth and Dividend Yield
Morgan Stanley raised its rating on Tupperware Brands (NYSE: TUP) from Equal-weight to Overweight and established a $76 price target.
Morgan Stanley said, "We believe TUP is by far the most undervalued company in our coverage as peer-low valuation does not reflect key positives, including: (1) our low-teens LT TUP EPS growth outlook is far ahead of a 7% peer avg, (2) TUP's high 25% ROIC (our ROIC vs. valuation analysis indicates TUP is 27% undervalued), and (3) TUP's strong balance sheet (1.2 times net debt/EBITDA) and high FCF yield (9% ‘13e) with little reinvestment risk as FCF is slated to be returned to shareholders. Bears will push back (somewhat fairly) that TUP's direct selling model, durables portfolio, and FX sensitivity deserve a valuation discount. However, over the last four years, TUP has delivered (FX neutral basis) ~7.5% avg organic sales, 18% profit growth and 20% EPS growth, while all these factors have existed."
Tupperware Brands closed at $59.10 on Wednesday.
Latest Ratings for TUP
|Nov 2016||B. Riley||Downgrades||Neutral||Sell|
|Apr 2016||B. Riley||Maintains||Neutral|
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