UPDATE: Morgan Stanley Upgrades Tyco International to Overweight on Expected EPS Growth

In a report published Monday, Morgan Stanley analyst Nigel Coe upgraded the rating on Tyco International Ltd. TYC from Equal-Weight to Overweight, and raised the price target from $36.00 to $39.00. In the report, Morgan Stanley noted, “We remain enthusiastic on construction, with an outlook for US non-resi construction growth that significantly exceeds GDP and the majority of manufacturing sub-sectors. Tyco is the most levered to non-residential construction verticals in the EE/MI group, accounting for 100% of total revenues with a favorable 75/25% mix of private vs. institutional. The trajectory of recovery remains a key debate. In a bear case, downside would be limited by Tyco's attractive 44% mix of stable service revenues. Net/net, risk/reward is skewed towards revenue acceleration through 2014/15.” Tyco International Ltd. closed on Friday at $32.95.