Nomura Securities Maintains a 'Buy' on United Technologies (UTX); Otis Pressures Forward Estimates

July 27, 2012 1:14 PM EDT Send to a Friend
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Price: $108.26 +0.26%

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Nomura Securities maintains a 'Buy' on United Technologies (NYSE: UTX) price target lowered to $86.00.

Analyst, Shannon O'Callaghan, said, "We’ve noted risk to the Otis guidance since last quarter, so the cut there was overdue in our view, but the Otis cut was bigger than we modeled. The quarter also showed more pressure at Transicold (truck/trailer and marine), leading to a guidance cut in CC&S, as well as a slowdown in commercial aero spares leading to a guide lower at Pratt. The potential for upside to the synergies at Goodrich (which closed yesterday) as well as benefits from $500M of restructuring in 2012 (up $50M from prior guidance) will be key earnings drivers into 2013. Otis also seems to be repairing some of the self inflicted damage in China from price increases that were not followed by the market. Still, the combination of weaker end markets and FX are exerting significant pressure on UTC’s earnings. We are reducing our 2012 EPS estimate to $5.25 (from $5.35) and our 2013 EPS estimate to $6.15 (from $6.45)."

For an analyst ratings summary and ratings history on United Technologies click here. For more ratings news on United Technologies click here.

Shares of United Technologies closed at $72.93 yesterday.




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