Deutsche Bank Downgrades United Technologies (UTX) to Hold
Deutsche Bank downgraded United Technologies (NYSE: UTX) from Buy to Hold with a price target of $112.00 (from $128.00). The change follows Q2 results and disappointing guidance.
"While UTX's 2Q results were generally in line with our thinking, the main focus on the day was the guidance cut and corresponding commentary," said analyst Myles Walton.
"Sales guidance (ex Sikorsky) moves down $1B to $57-58B while EPS (ex Sikorsky) moves down to $6.15-$6.30 from $6.35-$6.55. The company lowered segment EBIT by $500M (38c) countered by 15c of mostly one-time offsets. Half of the hit was due to a ~10% delta in the commercial aftermarket growth assumption in UTAS (not vetted quite enough). Another $175M was on an 8-9% cut to the China Otis outlook coupled with modestly lower European elevator service revenue. Moving to Hold on guidance cut & uncompelling '16/17' potential," Walton added.
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Shares of United Technologies closed at $102.71 yesterday.