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

Zacks Equity Research

United Technologies (UTX) closed at $130.39 in the latest trading session, marking a -0.37% move from the prior day. This change lagged the S&P 500's daily gain of 0.12%. Meanwhile, the Dow lost 0.08%, and the Nasdaq, a tech-heavy index, added 0.54%.

Coming into today, shares of the maker of elevators, jet engines and other products had gained 2.23% in the past month. In that same time, the Conglomerates sector gained 1.71%, while the S&P 500 gained 3.68%.

UTX will be looking to display strength as it nears its next earnings release, which is expected to be July 23, 2019. In that report, analysts expect UTX to post earnings of $2.03 per share. This would mark 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.

UTX's full-year Zacks Consensus Estimates are calling for earnings of $7.97 per share and revenue of $76.92 billion. These results would represent year-over-year changes of +4.73% and +15.66%, respectively.

Investors might also notice 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.

Our research shows that these estimate changes are directly correlated with near-term stock prices. We developed the Zacks Rank to capitalize on this phenomenon. Our system takes these estimate changes into account and delivers a clear, actionable rating model.

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 remained stagnant within the past month. UTX is currently a Zacks Rank #3 (Hold).

Digging into valuation, UTX currently has a Forward P/E ratio of 16.43. Its industry sports an average Forward P/E of 16.79, so we one might conclude that UTX is trading at a discount comparatively.

Meanwhile, UTX's PEG ratio is currently 1.87. 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. The Diversified Operations industry currently had an average PEG ratio of 1.87 as of yesterday's close.

The Diversified Operations industry is part of the Conglomerates sector. This industry currently has a Zacks Industry Rank of 106, which puts it in the top 42% 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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