We use cookies to understand how you use our site and to improve your experience. This includes personalizing content and advertising. To learn more, click here. By continuing to use our site, you accept our use of cookies, revised Privacy Policy and Terms of Service.
You are being directed to ZacksTrade, a division of LBMZ Securities and licensed broker-dealer. ZacksTrade and Zacks.com are separate companies. The web link between the two companies is not a solicitation or offer to invest in a particular security or type of security. ZacksTrade does not endorse or adopt any particular investment strategy, any analyst opinion/rating/report or any approach to evaluating individual securities.
If you wish to go to ZacksTrade, click OK. If you do not, click Cancel.
United Technologies Remains Well Poised for Organic Growth
Read MoreHide Full Article
On Dec 27, Zacks Investment Research updated the research report on diversified conglomerate, United Technologies Corporation .
United Technologies recently reiterated its earlier view for 2016. For 2017, the company anticipates adjusted earnings in the range of $6.30–$6.60 per share on revenues of $57.5–$59 billion, representing organic sales growth of 2–4% year over year. Despite a challenging macroeconomic environment and continued investments in the aerospace segment, the company expects to generate significant cash from operations to reward the shareholders with a risk-adjusted return.
United Technologies serves various end markets such as aerospace, defense and commercial construction, which move according to their own cycles. This business mix and diversification allows the company to remain profitable even during tough economic times, delivering consistent earnings and dividend growth. United Technologies also has a strong aftermarket business. The company not only manufactures and sells primary products such as elevators, aircraft engines and helicopters, but also sells spare parts and offers related services. The company’s aftermarket services business is relatively stable compared to new product delivery, and it helps offset the negative impact of downturns in the new products market. United Technologies has also revamped its aerospace unit by overhauling its organizational structure along with some key changes in the leadership positions within it. It anticipates that the streamlined organizational set up would enable it to better serve its customers.
United Technologies outperformed the Zacks categorized Diversified Operations industry with an average return of 8.1% compared with 5.7% for the latter, over a period of 90 days. In addition, over the same time frame, earnings estimate for the current year increased marginally by 0.2%.
However, the financial performance of the company depends on the conditions of the construction and aerospace industries. The company is also heavily dependent on the U.S. government’s budgetary allocation for defense. A reduction in capital spending for the commercial aviation or defense industries could have a significant effect on demand for its products, which could have an adverse impact on its financial performance.
With over 8,000 employees, United Technologies has a considerable presence in the U.K, registering approximately $2 billion in revenues from the region in 2015, out of the overall tally of $56.1 billion. Consequently, the company is susceptible to high operating risks following the Brexit referendum. Fluctuations in foreign currency exchange rates also affect the company’s net investment in foreign subsidiaries and may cause instability in cash flows related to foreign denominated transactions. These undermine its long-term growth to some extent.
United Technologies currently carries a Zacks Rank #3 (Hold). Some better-ranked stocks in the industry include Carlisle Companies Incorporated (CSL - Free Report) , Macquarie Infrastructure Corporation and Hitachi, Ltd. (HTHIY - Free Report) . Macquarie sports a Zacks Rank #1 (Strong Buy), where as Hitachi and Carlisle, both carry a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
Carlisle has a long-term earnings growth expectation of 16% and is currently trading at a forward P/E of 19.1x.
Macquarie has a positive average earnings surprise of 29.6% for the last four quarters, beating estimates twice.
Hitachi has a long-term earnings growth expectation of 13% and is currently trading at a forward P/E of 13.5x.
Zacks' Top 10 Stocks for 2017
In addition to the stocks discussed above, would you like to know about our 10 finest tickers for the entirety of 2017?
Who wouldn't? These 10 are painstakingly hand-picked from 4,400 companies covered by the Zacks Rank. They are our primary picks to buy and hold. Be among the very first to see them >>
See More Zacks Research for These Tickers
Normally $25 each - click below to receive one report FREE:
Image: Bigstock
United Technologies Remains Well Poised for Organic Growth
On Dec 27, Zacks Investment Research updated the research report on diversified conglomerate, United Technologies Corporation .
United Technologies recently reiterated its earlier view for 2016. For 2017, the company anticipates adjusted earnings in the range of $6.30–$6.60 per share on revenues of $57.5–$59 billion, representing organic sales growth of 2–4% year over year. Despite a challenging macroeconomic environment and continued investments in the aerospace segment, the company expects to generate significant cash from operations to reward the shareholders with a risk-adjusted return.
United Technologies serves various end markets such as aerospace, defense and commercial construction, which move according to their own cycles. This business mix and diversification allows the company to remain profitable even during tough economic times, delivering consistent earnings and dividend growth. United Technologies also has a strong aftermarket business. The company not only manufactures and sells primary products such as elevators, aircraft engines and helicopters, but also sells spare parts and offers related services. The company’s aftermarket services business is relatively stable compared to new product delivery, and it helps offset the negative impact of downturns in the new products market. United Technologies has also revamped its aerospace unit by overhauling its organizational structure along with some key changes in the leadership positions within it. It anticipates that the streamlined organizational set up would enable it to better serve its customers.
United Technologies outperformed the Zacks categorized Diversified Operations industry with an average return of 8.1% compared with 5.7% for the latter, over a period of 90 days. In addition, over the same time frame, earnings estimate for the current year increased marginally by 0.2%.
However, the financial performance of the company depends on the conditions of the construction and aerospace industries. The company is also heavily dependent on the U.S. government’s budgetary allocation for defense. A reduction in capital spending for the commercial aviation or defense industries could have a significant effect on demand for its products, which could have an adverse impact on its financial performance.
With over 8,000 employees, United Technologies has a considerable presence in the U.K, registering approximately $2 billion in revenues from the region in 2015, out of the overall tally of $56.1 billion. Consequently, the company is susceptible to high operating risks following the Brexit referendum. Fluctuations in foreign currency exchange rates also affect the company’s net investment in foreign subsidiaries and may cause instability in cash flows related to foreign denominated transactions. These undermine its long-term growth to some extent.
United Technologies currently carries a Zacks Rank #3 (Hold). Some better-ranked stocks in the industry include Carlisle Companies Incorporated (CSL - Free Report) , Macquarie Infrastructure Corporation and Hitachi, Ltd. (HTHIY - Free Report) . Macquarie sports a Zacks Rank #1 (Strong Buy), where as Hitachi and Carlisle, both carry a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
Carlisle has a long-term earnings growth expectation of 16% and is currently trading at a forward P/E of 19.1x.
Macquarie has a positive average earnings surprise of 29.6% for the last four quarters, beating estimates twice.
Hitachi has a long-term earnings growth expectation of 13% and is currently trading at a forward P/E of 13.5x.
Zacks' Top 10 Stocks for 2017
In addition to the stocks discussed above, would you like to know about our 10 finest tickers for the entirety of 2017?
Who wouldn't? These 10 are painstakingly hand-picked from 4,400 companies covered by the Zacks Rank. They are our primary picks to buy and hold. Be among the very first to see them >>