Is It Time To Buy United Technologies Corporation (UTX)?
Let’s talk about the popular United Technologies Corporation (NYSE:UTX). The company’s shares saw a decent share price growth in the teens level on the NYSE over the last few months. With many analysts covering the large-cap stock, we may expect any price-sensitive announcements have already been factored into the stock’s share price. But what if there is still an opportunity to buy? Today I will analyse the most recent data on UTX’s outlook and valuation to see if the opportunity still exists. See our latest analysis for UTX
What’s the opportunity in UTX?
The stock seems fairly valued at the moment according to my valuation model. It’s trading around 10% above my intrinsic value, which means if you buy UTX today, you’d be paying a relatively fair price for it. And if you believe that UTX is really worth $110.05, there’s only an insignificant downside when the price falls to its real value. Although, there may be an opportunity to buy in the future. This is because UTX’s beta (a measure of share price volatility) is high, meaning its price movements will be exaggerated relative to the rest of the market. If the market is bearish, UTX’s shares will likely fall by more than the rest of the market, providing a prime buying opportunity.
Can we expect growth from UTX?
Future outlook is an important aspect when you’re looking at buying a stock, especially if you are an investor looking for growth in your portfolio. Although value investors would argue that it’s the intrinsic value relative to the price that matter the most, a more compelling investment thesis would be high growth potential at a cheap price. With profit expected to grow by 24.94% over the next couple of years, the future seems bright for UTX. It looks like higher cash flows is on the cards for the stock, which should feed into a higher share valuation.
What this means for you:
Are you a shareholder? UTX’s optimistic future growth appears to have been factored into the current share price, with shares trading around its fair value. However, there are also other important factors which we haven’t considered today, such as the financial strength of the company. Have these factors changed since the last time you looked at UTX? Will you have enough confidence to invest in the company should the price drop below its fair value?
Are you a potential investor? If you’ve been keeping an eye on UTX, now may not be the most optimal time to buy, given it is trading around its fair value. However, the optimistic prospect is encouraging for UTX, which means it’s worth diving deeper into other factors such as the strength of its balance sheet, in order to take advantage of the next price drop.
Price is just the tip of the iceberg. Dig deeper into what truly matters – the fundamentals – before you make a decision on United Technologies. You can find everything you need to know about UTX in the latest infographic research report. If you are no longer interested in United Technologies, you can use our free platform to see my list of over 50 other stocks with a high growth potential.
To help readers see pass the short term volatility of the financial market, we aim to bring you a long-term focused research analysis purely driven by fundamental data. Note that our analysis does not factor in the latest price sensitive company announcements.
The author is an independent contributor and at the time of publication had no position in the stocks mentioned.
