UPDATE: Credit Suisse Upgrades Textron to Outperform, Raises PT
In a report published Friday, Credit Suisse Group upgraded its rating on Textron (NYSE: TXT) from Neutral to Outperform, and raised its price target from $26.00 to $30.00.
Credit Suisse noted, “TXT is one of the few diversified companies in our coverage that has not seen substantial strategic / portfolio / capital allocation shifts, either driven by activists (ADT, GDI, IR), or management (SPW, TYC). We note that the dividend is 90% below the prior peak, the Industrial segment has little overlap with the other businesses, Systems is a drag on the valuation multiple, and the company is not buying back stock. Selling the Systems/Industrial businesses could raise pre-tax proceeds worth ~45% of mkt cap and simplify the business model, which therefore makes TXT a potential target for activist-type shareholders. We see upside to >$30 on a SOTP basis. We are lowering our 2013 EPS estimates to $2.14 (from $2.32).”
Textron closed on Thursday at $25.69.
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Tags: Credit Suisse Group