J.P. Morgan reiterates its overweight rating on Tyco International (TYC ).
Analyst Don MacDougall says Tyco is set to emerge from a year of turmoil as one of the best stock stories in his universe over the next several years, given its portfolio of market-leading franchises in attractive growth markets, and management's focus on internal improvement.
MacDougall thinks Tyco's competitive position and growth opportunities remain strong. He sees three to five years of double-digit earnings per share growth. Despite concern expressed about management's $2.5 billion to $3 billion 2003 free cash flow target, MacDougall thinks his projection is conservative. He also thinks the current valuation reflects a "buyers' strike."