Esterline Tech (NYSE:ESL) EPS Estimates Raised on Improved Margins

With the margin outlook of Esterline Tech (NYSE:ESL) looking like it's going to improve, UBS (NYSE:UBS) raised their EPS estimates on the company.

UBS says, "We are raising our EPS estimates for ESL to reflect an improved margin outlook following productivity improvements in late FY10 along with accretion from its recent Eclipse acquisition. Our estimates move up by 11% on average to $4.60 in 2011E (from $4.20), $5.25 in 2012E (from $4.70) and $5.50 in 2013E (from $4.95).

"We don’t view valuation as particularly attractive trading at 15x our new 2011 EPS estimate, while we see ESL’s EPS growth as likely to slow. With roughly 45% of revs exposed to defense and another 15% from other non-aero markets, we think ESL’s top line growth will lag peers with more aerospace leverage, while further margin expansion could be difficult as all three segments are already at peak levels."

UBS reiterates their "Neutral" rating on on Esterline Tech (ESL), which closed Thursday at $70.21, falling $0.49, or 0.69 percent. UBS boosted their price target on Esterline from $60 to $72.