UPDATE: Sterne Agee Upgrades Rockwell Collins on ARINC Deal

In a report published on Tuesday, Sterne Agee analyst Peter Arment upgraded Rockwell Collins (NYSE: COL) from Neutral to Buy and established a price target of $88.

In the report, Sterne Agee stated, "While the ARINC deal is an expensive transaction, the long-term benefits outweigh the short-term dilution as the overall aerospace mix increases towards 60% and out- years earnings power is ~50% above current levels. Our out-year model estimates have been raised and we are upgrading COL to a Buy rating from Neutral with an $88 price target. The COL stock should continue to support a higher valuation as the profit mix from aerospace tops 60% in FY15."

Rockwell Collins closed on Monday at $73.33.