JP Morgan upgraded Tyco (TYC ) to long term buy.
Analyst Don MacDougall says the key unknown -- the timing of the CIT public offering -- may have been removed. He says the unconfirmed news, reported in Thursday's Wall Street Journal, is positive given investor concern about a possible delay. He believes a successful CIT offering would reduce liquidity concerns significantly, and allow investors to focus on the value of operating assets.
Although he still believes earnings per share and cash flow guidance could be negatively affected by recent events, he does not see enough downside to destroy Tyco's valuation case. The upgrade reflects the value of assets, but he cautions that risk remains.