Analyst Nicholas Heymann says the stock is trading in a range likely to be in the low $30s to low $40s as events surrounding recapitalization unfold. Tyco said it would repurchase $4.5 billion of its debt as new questions were raised about its disclosure of $8 billion in acquisitions.
Heymann says investors are seeking new parameters to assess the company's underlying value; there is little firm conviction of what assets will ultimately remain in the company's business portfolio or how sustainable its prior profitability levels are likely to remain. He sees $3.70 fiscal 2002 (Sept.) EPS, and $4.15 for fiscal 2003. He cut his $47 6-12 month target to $38, and maintains his hold rating.