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

Zacks Equity Research
Adobe Systems (ADBE) closed at $306.87 in the latest trading session, marking a -1.04% move from the prior day.

United Technologies (UTX) closed the most recent trading day at $137, moving +0.89% from the previous trading session. This move outpaced the S&P 500's daily gain of 0.16%. Elsewhere, the Dow gained 0.42%, while the tech-heavy Nasdaq added 0.03%.

Coming into today, shares of the maker of elevators, jet engines and other products had gained 8.36% in the past month. In that same time, the Conglomerates sector gained 2.91%, while the S&P 500 gained 2.89%.

Wall Street will be looking for positivity from UTX as it approaches its next earnings report date. This is expected to be April 23, 2019. In that report, analysts expect UTX to post earnings of $1.75 per share. This would mark a year-over-year decline of 1.13%. Meanwhile, the Zacks Consensus Estimate for revenue is projecting net sales of $18.08 billion, up 18.61% from the year-ago period.

UTX's full-year Zacks Consensus Estimates are calling for earnings of $7.92 per share and revenue of $77.02 billion. These results would represent year-over-year changes of +4.07% and +15.81%, respectively.

It is also important to note the recent changes to analyst estimates for UTX. These revisions help to show the ever-changing nature of near-term business trends. As such, positive estimate revisions reflect analyst optimism about the company's business and profitability.

Research indicates that these estimate revisions are directly correlated with near-term share price momentum. 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 ranges from #1 (Strong Buy) to #5 (Strong Sell). It has a remarkable, outside-audited track record of success, with #1 stocks delivering an average annual return of +25% since 1988. The Zacks Consensus EPS estimate has moved 0.05% lower within the past month. UTX is holding a Zacks Rank of #3 (Hold) right now.

Looking at its valuation, UTX is holding a Forward P/E ratio of 17.14. Its industry sports an average Forward P/E of 17.19, so we one might conclude that UTX is trading at a discount comparatively.

Investors should also note that UTX has a PEG ratio of 1.95 right now. 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 1.96 based on yesterday's closing prices.

The Diversified Operations industry is part of the Conglomerates sector. This group has a Zacks Industry Rank of 95, putting it in the top 38% of all 250+ industries.

The Zacks Industry Rank gauges the strength of our individual 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.

You can find more information on all of these metrics, and much more, on Zacks.com.


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