United Tech's post-merger drop overdone, Vertical Research says in upgrade

|About: United Technologies Corpora... (UTX)|By:, SA News Editor

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.

UTX's average Sell Side Rating is Outperform and its average Seeking Alpha Authors' Rating is Bullish, while its Quant Rating is Neutral.

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