With Aerospace Squared Away, Will United Technologies Go Back To Big Deals?
Stephen Simpson, CFA
Stephen Simpson, CFA
Fri, Jul. 15, 10:18 AM
- BMO technical analyst Russ Visch likes the following stocks:
- MMM: breaks out of 2-yr range, new target $205.
- AYI: successfully tested breakout at $241 level, next target $313.
- CAT: “lots of positive developments” including beginnings of a bearish-to-bullish reversal; rally above $81 would signal uptrend resuming with target of $105.
- EMR: successful retest of recent breakout, rally above $56.75 would open new target of $65.50.
- GE: breaks out of triangle pattern, next target $37, implies nearly 15% gain.
- TYC: has to breakout above $44 resistance, that would open new target of $48.
- UNP: in bearish-to-bullish reversal, new long-term uptrend underway, next target $113, implies 23% gain.
- UPS: to challenge all-time high at $114.40, breakout would be “extremely bullish” with new target $140.
- Also likes: FAST, FLR, JEC, MAS, PH, UTX, VRSK
Thu, Jul. 14, 10:57 AM
Mon, Jul. 11, 4:19 AM
- The Farnborough Airshow takes off today with executives from the aviation industry flying in to complete deals and unveil their latest technology.
- Brexit uncertainty could cloud demand for big jets, as Airbus (OTCPK:EADSY) and Boeing (NYSE:BA) look to snap up some scarce orders from the big carriers.
- Among the exhibitors: AJRD, AME, CAE, ERJ, FLIR, GD, HRS, LLL, LMT, RTN, SNA, SPR, TXT, UTX
Fri, Jul. 8, 8:52 AM
- United Technologies (NYSE:UTX) says its Pratt & Whitney unit was awarded a $1.5B contract from the Department of Defense to build more engines for its F-35 combat jet program; combined with previous awards for the batch of engines, the contract totals $1.95B.
- UTX says the low rate initial production contract will cover 99 total engines, as well as program management, engineering support, production non-recurring efforts, spare modules and spare parts.
- The new contract comes as Lockheed Martin (NYSE:LMT) is in the final stages of negotiations with the DoD to wrap up a multibillion-dollar contract for the next batch of F-35 jets.
Fri, Jun. 24, 4:42 PM
- United Technologies (NYSE:UTX) reaffirms its commitment to doing business in the U.K. and European Union following today's Brexit vote, saying it believes "the current benefits of a free and open trading zone will largely remain at the conclusion of this process."
- UTX also reaffirms its guidance for FY 2016 EPS of $6.30-$6.60 on revenues of $56B-$58B, vs. analyst consensus EPS of $6.55 on sales of $57B, and organic sales growth of 1%-3%.
- Citi analyst Jason Gursky says most defense names will be fine post-Brexit but UTX will be the most vulnerable, as 20% of its revenue comes from European operations and 8% from exports to Europe.
Wed, Jun. 15, 5:29 PM
- Airbus (OTCPK:EADSF, OTCPK:EADSY) faces a challenge to meet delivery targets for the A350 jet this year due to problems with suppliers, says Fabrice Bregier, president and CEO of the company's planemaking division.
- Airbus still must deliver at least 41 of the new long-haul jets to reach a target of more than 50 for the year, after a slow start blamed partly on shortages of seats and lavatories.
- Bregier says problems and delays with cabin equipment from Zodiac Aerospace (OTCPK:ZODFY) are improving but not enough to Airbus to meet all commitments; Zodiac said yesterday it continues to be affected by problems with lavatories for the A350 but that delays in seat production were coming under control.
- Bregier is more optimistic about production of the smaller A320neo, saying glitches with Pratt & Whitney (NYSE:UTX) engines were being fixed and that Airbus aims to catch up with delivery plans in H2 of the year.
Mon, Jun. 13, 6:10 PM
- RBC Capital analysts remain cautious on United Technologies (NYSE:UTX) after a recent meeting with CFO Akhil Johri, reiterating a Sector Perform rating and $108 price target on the shares.
- RBC is not as confident as the company about the Geared Turbofan project, noting that the supplier issues Pratt & Whitney already is seeing in the ramp leave it worried that there is risk of project profit headwinds totaling more than the $1B the company has estimated.
- Otis remains a quality outlook, but management’s belated decision to maintain market share rather than chase margin in China is still working itself through the system, the firm says.
Thu, Jun. 9, 11:01 AM
- At today's Deutsche Bank Global Industrials and Basic Materials Summit, United Tech (UTX -0.2%) CFO Akhil Johri said the company is "well on track" toward reaching its full year guidance.
- That includes EPS of $6.30-$6.40, sales of $56B-$58B, organic sales growth of 1%-3% and free cash flow of 90%-100% of net income.
Wed, Jun. 8, 3:47 PM
Mon, May 23, 3:21 AM
- President Obama kicked off his three-day visit to Vietnam with an announcement declaring the end of a U.S. arms embargo on the country, a ban that had been in place for decades.
- "We've come here as a symbol of the renewed ties....and the comprehensive partnership we have created over the course of my presidency," Obama said at a press conference.
- The trip will also see the nations discuss the Trans-Pacific Partnership, which is expected to usher in a new period of growth for export-oriented Vietnam.
- Related tickers: GD BA, NOC, LMT, RTN, OA, HII, HON, UTX, OTCPK:EADSF, ITT, TXT, LLL, OTCPK:BAESY, OTCPK:FINMY, COL
- ETFs: VNM
Tue, May 10, 1:50 PM
- Growth stocks have outperformed value stocks each year since 2007, but value investors are often rewarded after such periods. C.T. Fitzpatrick, the CIO of Vulcan Value Partners and the manager of Vulcan Value Partners Fund (MUTF:VVPLX), who has beaten the S&P 500 and its peers every year for the past five years gave his 4 value picks in an interview with Barron's.
- Oracle (NYSE:ORCL) is his top pick. Oracle and SAP (NYSE:SAP), both are leaders in the big enterprise market, but Oracle is in a better position with its applications plus database products along with being ahead in converting its customers to the cloud.
- National Oilwell Varco (NYSE:NOV) is a value pick since it generated tremendous free cash flow despite a poor quarter.
- Anthem (NYSE:ANTM) is a new addition since its business model is well-suited for the Affordable Care Act. Fitzpatrick believes that the company's stock price doesn't reflect the fundamentals.
- United Technologies (NYSE:UTX) gets interest as it has generated high free cash flow despite its bottom line being hurt by the strong dollar. Their accretion of cash is helping return on capital thereby making it a value pick.
- His top 10 holdings as of Dec. 31 are Oracle, Parker Hannifin (NYSE:PH), National Oilwell Varco, Franklin Resources (NYSE:BEN), Discovery Communication (NASDAQ:DISCK), Swiss RE AG, MasterCard (NYSE:MA), Cisco Systems (NASDAQ:CSCO), Anthem and Boeing (NYSE:BA).
Tue, May 3, 12:29 PM
- United Technologies (UTX -1.9%) is downgraded to Sector Perform from Outperform with a $108 price target at RBC Capital because the firm says Honeywell's actions indicate the company no longer is interested in buying UTX.
- The firm says that when it upgraded UTX a few months ago, it was with the premise that HON would remain a stalking horse given its thwarted bid, but subsequent actions including HON's selection of an heir apparent to CEO Dave Cote and a new $5B buyback program suggest that HON has moved on.
- Meanwhile, the underlying business outlook for UTX remains pretty much the same, RBC says, remaining concerned not just about Geared Turbofan execution but also the outlook for China.
- Now read United Tech downgraded to Neutral from Buy at Goldman
Mon, May 2, 12:46 PM
- United Technologies (UTX +0.1%) is downgraded to Neutral from Buy with a $107 price target at Goldman Sachs on valuation after shares appreciated by 23% since February lows.
- Goldman views UTX as a high quality company well positioned in its end markets and likely to grow faster than GDP in the long term but with growth slowing in aerospace, minor challenges with the GTF entry into service, and margins declining in a few segments.
- The firm lowers its EPS estimates for 2016, 2017 and 2018 to reflect lower Pratt and Otis margins.
- Now read UTX to buy back $3B this year; still expects to hit EPS guidance
Wed, Apr. 27, 7:30 AM
- Q1 adjusted EPS of $1.47 gained 2% from a year ago. Revenue of $13.4B was flat, with 200 basis points of organic growth offset by 200 basis points of unfavorable forex.
- Cash flow from operations of $795M, with capex of $286M. Free cash flow of 43% of net income was hit by inventory build and the first of four $237M annual payments related to the Canadian government settlement. For all 2016, the company continues to see free cash flow of 90-100% of net income.
- Share buybacks should be $3B in addition to the already announced $6B accelerated repurchase program.
- Another $1B-$2B in acquisitions is expected.
- Full-year EPS is still expected to hit $6.30-$6.60 despite the sluggish macro environment.
- Conference call at 8 ET
- Previously: United Technologies beats by $0.08, beats on revenue (April 27)
- UTX flat premarket
Wed, Apr. 27, 7:00 AM
Tue, Apr. 26, 5:30 PM
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United Technologies Corp. provides products and services to the building systems and aerospace industries worldwide. The company operates through five business segments: Otis, UTC Climate, Controls & Security, Pratt & Whitney, UTC Aerospace Systems, and Sikorsky. The Otis segment designs,... More
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