UPDATE: Credit Suisse Reiterates Outperform Rating, Raises PT on Ingersoll-Rand PLC Following Revised Estimates

In a report published Thursday, Credit Suisse analyst Julian Mitchell reiterated an Outperform rating on Ingersoll-Rand PLC

, and raised the price target from $59.00 to $65.00. In the report, Mitchell noted, “Based on our updated SOTP framework, ahead of the split later this year, we raise our TP on IR to $65 (from $59). It remains one of our top picks for both 2H13 and over the medium term. Our view is that at the current price, investors are paying very little for IR Security, which is unjustified. Assuming pro-forma leverage of 3.0x Gross Debt/EBITDA, IR Security is worth $15 in equity value within our SOTP. Increasing leverage at IR Security better aligns its capital structure with peers and lowers WACC, which unlocks value in our DCF. Low penetration and growing popularity of automated locks provides a solid backdrop for organic growth and solid barriers to entry (Regulation/SKUs/Brand) should protect margins as the business scales. We expect the company to pursue a strategy akin to that of Assa Abloy, with M&A (initially US businesses) the priority for capital allocation as the electronics exposure is ramped up.” Ingersoll-Rand PLC closed on Wednesday at $55.52.