NEW YORK (TheStreet) -- Tyco International (TYC) had coverage initiated today with an "outperform" rating by analysts at CLSA.
Tyco opened trading at $41.56 on Thursday. The firm set a price target of $48 on the shares.
Must Read: Warren Buffett's 10 Favorite Growth Stocks
CLSA believes that Tyco stock is in position for a turnaround after years of decline based on a multiyear volume recovery plan.
"We expect Tyco to deliver significant margin and returns expansion over the next three years. Most of this improvement will be driven by cost-cutting and productivity benefits," analysts said.
- Powered by its strong earnings growth of 67.64% and other important driving factors, this stock has surged by 26.32% over the past year, outperforming the rise in the S&P 500 Index during the same period. Regarding the stock's future course, our hold rating indicates that we do not recommend additional investment in this stock despite its gains in the past year.
- TYCO INTERNATIONAL LTD reported significant earnings per share improvement in the most recent quarter compared to the same quarter a year ago. The company has demonstrated a pattern of positive earnings per share growth over the past year. We feel that this trend should continue. This trend suggests that the performance of the business is improving. During the past fiscal year, TYCO INTERNATIONAL LTD turned its bottom line around by earning $1.12 versus -$0.72 in the prior year. This year, the market expects an improvement in earnings ($2.00 versus $1.12).
- The current debt-to-equity ratio, 0.32, is low and is below the industry average, implying that there has been successful management of debt levels. Although the company had a strong debt-to-equity ratio, its quick ratio of 0.71 is somewhat weak and could be cause for future problems.
- The company's current return on equity greatly increased when compared to its ROE from the same quarter one year prior. This is a signal of significant strength within the corporation. When compared to other companies in the Commercial Services & Supplies industry and the overall market, TYCO INTERNATIONAL LTD's return on equity is below that of both the industry average and the S&P 500.
- You can view the full analysis from the report here: TYC Ratings Report
STOCKS TO BUY: TheStreet Quant Ratings has identified a handful of stocks that can potentially TRIPLE in the next 12 months. Learn more.
Select the service that is right for you!COMPARE ALL SERVICES
- $2.5+ million portfolio
- Large-cap and dividend focus
- Intraday trade alerts from Cramer
- Weekly roundups
Access the tool that DOMINATES the Russell 2000 and the S&P 500.
- Buy, hold, or sell recommendations for over 4,300 stocks
- Unlimited research reports on your favorite stocks
- A custom stock screener
- Upgrade/downgrade alerts
- Diversified model portfolio of dividend stocks
- Alerts when market news affect the portfolio
- Bi-weekly updates with exact steps to take - BUY, HOLD, SELL
- Real Money + Doug Kass Plus 15 more Wall Street Pros
- Intraday commentary & news
- Ultra-actionable trading ideas
- 100+ monthly options trading ideas
- Actionable options commentary & news
- Real-time trading community
- Options TV