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United Technologies (UTX) Gains But Lags Market: What You Should Know

Zacks Equity Research

United Technologies (UTX) closed the most recent trading day at $136.52, moving +0.1% from the previous trading session. This move lagged the S&P 500's daily gain of 0.51%. Meanwhile, the Dow gained 0.36%, and the Nasdaq, a tech-heavy index, added 0.75%.

Prior to today's trading, shares of the maker of elevators, jet engines and other products had gained 5.31% over the past month. This has lagged the Conglomerates sector's gain of 7.14% and outpaced the S&P 500's gain of 3.44% in that time.

Wall Street will be looking for positivity from UTX as it approaches its next earnings report date. The company is expected to report EPS of $2.04, up 5.7% from the prior-year quarter. Our most recent consensus estimate is calling for quarterly revenue of $19.24 billion, up 16.52% from the year-ago period.

Looking at the full year, our Zacks Consensus Estimates suggest analysts are expecting earnings of $8.03 per share and revenue of $77.13 billion. These totals would mark changes of +5.52% and +15.98%, respectively, from last year.

It is also important to note the recent changes to analyst estimates for UTX. These revisions typically reflect the latest short-term business trends, which can change frequently. As such, positive estimate revisions reflect analyst optimism about the company's business and profitability.

Based on our research, we believe these estimate revisions are directly related to near-team stock moves. Investors can capitalize on this by using the Zacks Rank. This model considers these estimate changes and provides a simple, actionable rating system.

The Zacks Rank system, which ranges from #1 (Strong Buy) to #5 (Strong Sell), has an impressive outside-audited track record of outperformance, with #1 stocks generating an average annual return of +25% since 1988. The Zacks Consensus EPS estimate has moved 0.06% higher within the past month. UTX currently has a Zacks Rank of #2 (Buy).

Valuation is also important, so investors should note that UTX has a Forward P/E ratio of 16.98 right now. This valuation marks a premium compared to its industry's average Forward P/E of 16.91.

Also, we should mention that UTX has a PEG ratio of 1.93. This metric is used similarly to the famous P/E ratio, but the PEG ratio also takes into account the stock's expected earnings growth rate. UTX's industry had an average PEG ratio of 1.86 as of yesterday's close.

The Diversified Operations industry is part of the Conglomerates sector. This group has a Zacks Industry Rank of 41, putting it in the top 17% of all 250+ industries.

The Zacks Industry Rank gauges the strength of our industry groups by measuring the average Zacks Rank of the individual stocks within the groups. 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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