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Why You Should Hold on to United Technologies (UTX) Stock
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President Trump’s first budget primarily emphasizes on increasing the country’s military spending. Per the budget, the Department of Homeland Security is expected to see a 6% increase in spending.
United Technologies Corporation serves various end-markets such as aerospace, defense and commercial construction. The company works closely with the defense forces to provide them the best in class equipment and solutions. This budget is likely to help United Technologies boost their revenues in the near future.
In order to fuel its growth momentum, the company remains focused on four key priorities: flawless execution, innovation for growth, structural cost reduction and disciplined capital allocation. United Technologies is also seeking potential acquisition targets to achieve aggressive revenue targets and augment its market position.
The company reported modest fourth-quarter 2016 results, based on which it affirmed its guidance for 2017. It expects adjusted earnings in the range of $6.30–$6.60 per share on revenues of $57.5 billion to $59 billion. The company reaffirmed its acquisition expectations of $1–$2 billion and free cash flow guidance in the range of 90–100% of net income. It also plans to repurchase shares worth $3.5 billion in 2017.
Shares of United Technologies have gained momentum since Feb 2017. Over the last 90 days, the stock gained 1.2% against the Zacks categorized Advertising and Marketing industry’s loss of 0.1%. In addition, over the same period, the company’s current-year earnings estimates inched up from $6.55 per share to $6.56.
Despite a Zacks Rank # 3 (Hold), the company has a VGM Score of ‘B’. Its valuation metrics reflect that it may be undervalued at the moment compared with its peers. Its Value Score of ‘B’ indicates that it is a compelling pick for value investors. The financial health and growth prospects of United Technologies reveal its potential to perform in-line with the market.
Bottom Line
Based on the points we have discussed above, we believe that the investors should currently stay invested in the stock. The company’s growth prospects make it a compelling pick, as investors may want to wait for broader factors to improve.
Hitachi has a long-term earnings growth expectation of 13% and is currently trading at a forward P/E of 13.4x.
LSB Industries has a long-term earnings growth expectation of 12%.
Bunzl has a long-term earnings growth expectation of 7.5% and is currently trading at a forward P/E of 20.6x.
More Stock News: This Is Bigger than the iPhone!
It could become the mother of all technological revolutions. Apple sold a mere 1 billion iPhones in 10 years but a new breakthrough is expected to generate more than 27 billion devices in just 3 years, creating a $1.7 trillion market.
Zacks has just released a Special Report that spotlights this fast-emerging phenomenon and 6 tickers for taking advantage of it. If you don't buy now, you may kick yourself in 2020. Click here for the 6 trades >>
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Why You Should Hold on to United Technologies (UTX) Stock
President Trump’s first budget primarily emphasizes on increasing the country’s military spending. Per the budget, the Department of Homeland Security is expected to see a 6% increase in spending.
United Technologies Corporation serves various end-markets such as aerospace, defense and commercial construction. The company works closely with the defense forces to provide them the best in class equipment and solutions. This budget is likely to help United Technologies boost their revenues in the near future.
In order to fuel its growth momentum, the company remains focused on four key priorities: flawless execution, innovation for growth, structural cost reduction and disciplined capital allocation. United Technologies is also seeking potential acquisition targets to achieve aggressive revenue targets and augment its market position.
The company reported modest fourth-quarter 2016 results, based on which it affirmed its guidance for 2017. It expects adjusted earnings in the range of $6.30–$6.60 per share on revenues of $57.5 billion to $59 billion. The company reaffirmed its acquisition expectations of $1–$2 billion and free cash flow guidance in the range of 90–100% of net income. It also plans to repurchase shares worth $3.5 billion in 2017.
Shares of United Technologies have gained momentum since Feb 2017. Over the last 90 days, the stock gained 1.2% against the Zacks categorized Advertising and Marketing industry’s loss of 0.1%. In addition, over the same period, the company’s current-year earnings estimates inched up from $6.55 per share to $6.56.
Despite a Zacks Rank # 3 (Hold), the company has a VGM Score of ‘B’. Its valuation metrics reflect that it may be undervalued at the moment compared with its peers. Its Value Score of ‘B’ indicates that it is a compelling pick for value investors. The financial health and growth prospects of United Technologies reveal its potential to perform in-line with the market.
Bottom Line
Based on the points we have discussed above, we believe that the investors should currently stay invested in the stock. The company’s growth prospects make it a compelling pick, as investors may want to wait for broader factors to improve.
Stocks to Consider
Some better-ranked stocks in the industry include Hitachi, Ltd. (HTHIY - Free Report) , LSB Industries, Inc. (LXU - Free Report) and Bunzl plc (BZLFY - Free Report) , each carrying a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Hitachi has a long-term earnings growth expectation of 13% and is currently trading at a forward P/E of 13.4x.
LSB Industries has a long-term earnings growth expectation of 12%.
Bunzl has a long-term earnings growth expectation of 7.5% and is currently trading at a forward P/E of 20.6x.
More Stock News: This Is Bigger than the iPhone!
It could become the mother of all technological revolutions. Apple sold a mere
1 billion iPhones in 10 years but a new breakthrough is expected to generate more
than 27 billion devices in just 3 years, creating a $1.7 trillion market.
Zacks has just released a Special Report that spotlights this fast-emerging
phenomenon and 6 tickers for taking advantage of it. If you don't buy now, you may
kick yourself in 2020. Click here for the 6 trades >>