United Technologies (UTX +0.5%) has shed ~5% since it started the week with news of its proposed merger with Raytheon (RTN +0.6%), and Vertical Research analyst Jeff Sprague thinks it fallen too far, upgrading shares to Buy from Hold, although he trims his price target to $145 from $150.
While there are plenty of concerns to consider - from the already complex nature of the company to worries that management is too focused on "empire building" - Sprague thinks they are now fully priced in the stock and UTX shares are attractively valued.
Shareholders could reject the UTX-RTN merger, but Sprague says it is more likely that opponents are selling now rather than waiting to vote; either way, he believes UTX is too cheap too ignore even if the merger fails to transpire.
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