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United Technologies (UTX) Outpaces Stock Market Gains: What You Should Know

Zacks Equity Research

United Technologies (UTX) closed at $133 in the latest trading session, marking a +0.79% move from the prior day. This move outpaced the S&P 500's daily gain of 0.77%. Elsewhere, the Dow gained 0.67%, while the tech-heavy Nasdaq added 0.75%.

Heading into today, shares of the maker of elevators, jet engines and other products had gained 2% over the past month, lagging the Conglomerates sector's gain of 8.21% and the S&P 500's gain of 8.19% in that time.

Wall Street will be looking for positivity from UTX as it approaches its next earnings report date. This is expected to be July 23, 2019. On that day, UTX is projected to report earnings of $2.03 per share, which would represent year-over-year growth of 3.05%. Meanwhile, our latest consensus estimate is calling for revenue of $19.46 billion, up 16.49% from the prior-year quarter.

Looking at the full year, our Zacks Consensus Estimates suggest analysts are expecting earnings of $7.97 per share and revenue of $76.72 billion. These totals would mark changes of +4.73% and +15.36%, respectively, from last year.

Any recent changes to analyst estimates for UTX should also be noted by investors. These recent revisions tend to reflect the evolving nature of short-term business trends. With this in mind, we can consider positive estimate revisions a sign of optimism about the company's business outlook.

Research indicates that these estimate revisions are directly correlated with near-term share price momentum. To benefit from this, we have developed the Zacks Rank, a proprietary model which takes these estimate changes into account and provides an 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. Within the past 30 days, our consensus EPS projection remained stagnant. UTX currently has a Zacks Rank of #3 (Hold).

Valuation is also important, so investors should note that UTX has a Forward P/E ratio of 16.56 right now. Its industry sports an average Forward P/E of 17.12, so we one might conclude that UTX is trading at a discount comparatively.

Also, we should mention that UTX has a PEG ratio of 1.88. 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. Diversified Operations stocks are, on average, holding a PEG ratio of 1.88 based on yesterday's closing prices.

The Diversified Operations industry is part of the Conglomerates sector. This industry currently has a Zacks Industry Rank of 103, which puts it in the top 41% 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.

To follow UTX in the coming trading sessions, be sure to utilize Zacks.com.

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