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United Technologies (UTX) Dips More Than Broader Markets: What You Should Know

Zacks Equity Research

United Technologies (UTX) closed at $153.19 in the latest trading session, marking a -0.32% move from the prior day. This change lagged the S&P 500's daily loss of 0.28%. Meanwhile, the Dow lost 0.42%, and the Nasdaq, a tech-heavy index, lost 0.03%.

Coming into today, shares of the maker of elevators, jet engines and other products had gained 5.1% in the past month. In that same time, the Conglomerates sector gained 4.39%, while the S&P 500 gained 3.31%.

UTX will be looking to display strength as it nears its next earnings release. On that day, UTX is projected to report earnings of $1.84 per share, which would represent a year-over-year decline of 5.64%. Meanwhile, the Zacks Consensus Estimate for revenue is projecting net sales of $19.33 billion, up 7.12% from the year-ago period.

Investors should also note any 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.

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 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 remained stagnant 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 17.59. Its industry sports an average Forward P/E of 16.91, so we one might conclude that UTX is trading at a premium comparatively.

It is also worth noting that UTX currently has a PEG ratio of 2. 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. The Diversified Operations industry currently had an average PEG ratio of 2.07 as of yesterday's close.

The Diversified Operations industry is part of the Conglomerates sector. This industry currently has a Zacks Industry Rank of 178, which puts it in the bottom 31% 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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