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United Technologies (UTX) Dips More Than Broader Markets: What You Should Know

Zacks Equity Research

United Technologies (UTX) closed at $146.22 in the latest trading session, marking a -0.52% move from the prior day. This change lagged the S&P 500's 0.32% loss on the day. Meanwhile, the Dow lost 0.38%, and the Nasdaq, a tech-heavy index, lost 0.4%.

Heading into today, shares of the maker of elevators, jet engines and other products had lost 1.17% over the past month, lagging the Conglomerates sector's gain of 1% and the S&P 500's gain of 2.51% in that time.

Investors will be hoping for strength from UTX as it approaches its next earnings release. On that day, UTX is projected to report earnings of $1.84 per share, which would represent a year-over-year decline of 5.64%. Meanwhile, the Zacks Consensus Estimate for revenue is projecting net sales of $19.33 billion, up 7.12% from the year-ago period.

For the full year, our Zacks Consensus Estimates are projecting earnings of $8.14 per share and revenue of $76.84 billion, which would represent changes of +6.96% and +15.55%, respectively, from the prior year.

It is also important to note the recent changes to analyst estimates for UTX. These recent revisions tend to reflect the evolving nature of short-term business trends. As a result, we can interpret positive estimate revisions as a good sign for the company's business outlook.

Our research shows that these estimate changes are directly correlated with near-term stock prices. Investors can capitalize on this by using the Zacks Rank. This model considers these estimate changes and provides a simple, actionable rating system.

Ranging from #1 (Strong Buy) to #5 (Strong Sell), the Zacks Rank system has a proven, outside-audited track record of outperformance, with #1 stocks returning an average of +25% annually since 1988. Over the past month, the Zacks Consensus EPS estimate remained stagnant. UTX is currently sporting a Zacks Rank of #2 (Buy).

Investors should also note UTX's current valuation metrics, including its Forward P/E ratio of 18.06. This represents a premium compared to its industry's average Forward P/E of 17.5.

It is also worth noting that UTX currently has a PEG ratio of 2.05. The PEG ratio is similar to the widely-used P/E ratio, but this metric also takes the company's expected earnings growth rate into account. UTX's industry had an average PEG ratio of 2.05 as of yesterday's close.

The Diversified Operations industry is part of the Conglomerates sector. This group has a Zacks Industry Rank of 99, putting it in the top 39% of all 250+ industries.

The Zacks Industry Rank includes is listed in order from best to worst in terms of the average Zacks Rank of the individual companies within each of these sectors. Our research shows that the top 50% rated industries outperform the bottom half by a factor of 2 to 1.

Be sure to follow all of these stock-moving metrics, and many more, on Zacks.com.

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