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United Technologies (UTX) Stock Sinks As 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.

In the latest trading session, United Technologies (UTX) closed at $125.92, marking a -0.76% move from the previous day. This move lagged the S&P 500's daily gain of 0.5%. Elsewhere, the Dow gained 0.54%, while the tech-heavy Nasdaq added 0.76%.

Heading into today, shares of the maker of elevators, jet engines and other products had gained 2.22% over the past month, lagging the Conglomerates sector's gain of 4.64% and the S&P 500's gain of 2.53% in that time.

UTX will be looking to display strength as it nears its next earnings release. In that report, analysts expect UTX to post earnings of $1.77 per share. This would mark no growth from the prior-year quarter. Meanwhile, our latest consensus estimate is calling for revenue of $18.08 billion, up 18.61% from the prior-year quarter.

For the full year, our Zacks Consensus Estimates are projecting earnings of $7.93 per share and revenue of $77.01 billion, which would represent changes of +4.2% and +15.81%, respectively, from the prior 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 a result, we can interpret positive estimate revisions as a good sign for 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.

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. Within the past 30 days, our consensus EPS projection has moved 0.4% higher. UTX is currently a Zacks Rank #2 (Buy).

In terms of valuation, UTX is currently trading at a Forward P/E ratio of 16.01. Its industry sports an average Forward P/E of 16.02, so we one might conclude that UTX is trading at a discount comparatively.

We can also see that UTX currently has a PEG ratio of 1.82. This popular metric is similar to the widely-known P/E ratio, with the difference being that the PEG ratio also takes into account the company'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 72, putting it in the top 29% 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.

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


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