Tyco (TYC) Stock Price Target Raised at Credit Suisse
NEW YORK (TheStreet) -- CreditSuisse raised its price target on TycoInternational (TYC) stock to $45 from $40 on Monday. The firm maintained its "outperform" rating on the stock.
The Irish security systems company projected sales growth of 0% to 2% in fiscal 2016, which is was in-line with Credit Suisse's projections.
"The sluggish profile of Tyco's top-line in recent years leads us to think the guide is at risk," the firm said. "This sluggishness is partly end-market related, but investors will naturally have concerns that there may be more structural factors at play, such as the risk the traditional installation business loses wallet share as the technology penetration of buildings rises (a topic we have written about on several occasions), or that pricing pressure is intense on large project activity (and there is little reason why this would change)."
Credit Suisse was maintaining its "outperform" rating on Tyco stock because the company should offer some resilience if the Industrial cycle sees further deterioration, the firm said.
Tyco stock closed up by 1.13% to $35.71 on heavy trading volume on Monday. By the market close on Monday, 5.58 million shares of Tyco have traded, versus its 30-day average of 2.72 million shares.
Separately, TheStreet Ratings team rates TYCO INTERNATIONAL PLC as a Hold with a ratings score of C. TheStreet Ratings Team has this to say about their recommendation:
We rate TYCO INTERNATIONAL PLC (TYC) a HOLD. The primary factors that have impacted our rating are mixed - some indicating strength, some showing weaknesses, with little evidence to justify the expectation of either a positive or negative performance for this stock relative to most other stocks. The company's strengths can be seen in multiple areas, such as its increase in net income, reasonable valuation levels and expanding profit margins. However, as a counter to these strengths, we also find weaknesses including weak operating cash flow, a generally disappointing performance in the stock itself and disappointing return on equity.
Highlights from the analysis by TheStreet Ratings Team goes as follows:
- The net income growth from the same quarter one year ago has significantly exceeded that of the S&P 500 and the Commercial Services & Supplies industry. The net income increased by 174.2% when compared to the same quarter one year prior, rising from -$89.00 million to $66.00 million.
- The debt-to-equity ratio is somewhat low, currently at 0.78, and is less than that of the industry average, implying that there has been a relatively successful effort in the management of debt levels. Although the company had a strong debt-to-equity ratio, its quick ratio of 0.85 is somewhat weak and could be cause for future problems.
- The company's current return on equity has slightly decreased from the same quarter one year prior. This implies a minor weakness in the organization. Compared to other companies in the Commercial Services & Supplies industry and the overall market on the basis of return on equity, TYCO INTERNATIONAL PLC has underperformed in comparison with the industry average, but has exceeded that of the S&P 500.
- Net operating cash flow has significantly decreased to $29.00 million or 90.06% when compared to the same quarter last year. In addition, when comparing to the industry average, the firm's growth rate is much lower.
- You can view the full analysis from the report here: TYC
Any reference to TheStreet Ratings and its underlying recommendation does not reflect the opinion of Jim Cramer, TheStreet or any of its contributors.