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Here's Why Investing in United Technologies Makes Sense

Zacks Equity Research

United Technologies Corporation UTX has impressed investors with its recent earnings streak, having surpassed estimates in each of the four trailing quarters. The company’s share price increase reflects its impressive performance, exhibiting investor optimism over the stock.

Over the past year, the company has gained 1.4% against industry’s decline of 0.1%.

The stock currently carries a Zacks Rank #2 (Buy).We believe that its notable traction across markets will drive growth in the upcoming quarters.

Factors to Consider

United Technologies is well poised to gain from strength in commercial and military aftermarket businesses coupled with continued revenue passenger mile growth in the quarters ahead.

Also, rise in GTF engine production, continued investment in innovation and service transformation as well as launch of new products, particularly at the Carrier segment are likely to drive the company's Commercial business revenues. Continued growth in refrigeration and HVAC end markets' demand will also boost its top line in the quarters ahead.

United Technologies intends to become more competent on the back of meaningful business acquisitions. In this regard, the buyout of Rockwell Collins (completed in November 2018) is worth mentioning. Notably, this deal is not only expected to fortify the company's existing product portfolio but also aid in launching innovative solutions for the aerospace customers.

Moreover, the acquisition of S2 Security (in October 2018) and Predikto (in August 2018) will likely strengthen its revenues and profitability.

In addition, the company intends to separate its existing businesses into three entities. If it gets the required approvals, it is likely to help companies to innovate, provide better customized solutions to customers and create greater value for shareholders.

Other Key Picks

Some other top-ranked stocks in the same space are Carlisle Companies Incorporated CSL, Federal Signal Corporation FSS and Macquarie Infrastructure Company MIC. While Carlisle sports a Zacks Rank #1 (Strong Buy), Federal Signal and Macquarie carry a Zacks Rank #2. You can see the complete list of today’s Zacks #1 Rank stocks here.

Carlisle surpassed estimates thrice in the trailing four quarters, the average being 15.00%.

Federal Signal exceeded estimates in the trailing four quarters, the average being 21.65%.

Macquarie surpassed estimates twice in the trailing four quarters, the average being 0.51%.

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Carlisle Companies Incorporated (CSL) : Free Stock Analysis Report
 
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