Tyco Electronics Shares Edge Higher

HARTFORD, Conn. (AP) — Shares of Tyco Electronics Ltd., a maker of electronic components and undersea telecommunications systems, edged higher Wednesday afternoon as an analyst increased his price target to reflect a reduced credit risk and slightly higher assumptions on revenue.

UBS Investment Research analyst Amitabh Passi lifted his share price target to $18 from $11.50.

Tyco's recently announced $675 million sale of its wireless systems business to government contractor Harris Corp. gives Tyco the flexibility to pay down debt and make repayments less burdensome, Passi said in a note to investors.

However, markets for the automotive industry and for Europe have yet to show signs of improvement, he said.

"We believe structural changes — bankruptcies, mergers and acquisitions — and dependence on credit in the automotive industry continue to pose risk for Tyco Electronics, and find expectations running relatively high with the run-up in shares," Passi said.

Tyco Electronics' share price has more than doubled since early March.

Passi maintained his 2009 earnings estimate of 58 cents per share and 2010 estimate of 83 cents per share. He maintained a "Neutral" rating.

Shares of Tyco Electronics rose 40 cents, or 2.3 percent, to $17.97 in afternoon trading.