Raymond James Upgrades Tupperware to 'Strong Buy'

Analyst Budd Bugatch says the maker of plastic storage containers's outsized dividend yield is a long-term, risk free rate

Raymond James upgraded Tupperware (TUP ) to strong buy from underperform.

Analyst Budd Bugatch says the maker of plastic storage containers is capitalizing on a market-driven opportunity. The upgrade is based on the company's outsized current dividend yield; a stock price that appears to now discount near-term deteriorating operating results, and the risk that this will continue. Bugatch says at $16 per share, the dividend yield is about 5.5%. He says this is a benchmark yield that represents his estimate of a long-term, risk free rate.

He also notes at this price, the stock promises investors an adequate cash return while waiting for a stock price catalyst. He is keeping his $1.58 2002 and $1.76 2003 earnings per share estimates Bugatch has a $20 target.

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