United Technologies Corporation (NYSE:UTX) — I last reviewed this large-cap aerospace and industrial giant on Nov. 28. The company manufactures Pratt & Whitney jet engines, Otis elevators and Carrier air conditioners.
Sales are projected to increase 3% in 2017 and 5% in 2018, mostly from improving demand for aerospace products. Currency weakness could cut 1%-2% off of 2017’s top line. However, Standard & Poor’s expects organic growth to accelerate in 2017-18, due to strong North American growth for aerospace, building and industrial products and services.
United Technologies reported earnings of $6.13 in 2016 and projects $6.56 in 2017 and $7.09 in 2018. Further, they forecast that long-term earnings improvements could be “sizable.” Thus on Jan. 25, S&P maintained their “four-star buy” on the shares and increased their price target by $5 to $124.
UTX stock successfully tested its 200-day moving average, now at $106.83, in October and November. In November the stock jumped to a high of $109.42, closely matching the closing high at $109.69 in August. This formed a barrier, which it exceeded in December, resulting in a bull channel within the broad bull channel.
A successful test of the support line for each occurred on Dec. 2 at $106.85 with a CBR Buy from my proprietary indicator. Thus, those who bought UTX at $108 should continue to hold for a revised target of $125. New buyers should consider purchasing UTX at $112 for a potential gain of over 11%.
UTX stock pays a dividend of $2.64 for a dividend yield of 2.3% annually. Investors, too, should consider United Technologies as a purchase for long-term growth in the aerospace and defense industry.
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