The projected 3-4% FY2010 revenue growth for UTX is looking a tad low, due to large order backlogs for both Boeing (NYSE: BA) and Airbus. Wall Street had factored-in some order deferments/cancellations, and that did weigh on United Technologies shares this summer, but now it appears the D/Cs will not be as large, which removes a potential revenue cloud.
Further, infrastructure development in emerging markets bodes well for divisions Otis (elevators) and Carrier (air conditioning/heating). Any pick-up in U.S. construction would represent an additional tailwind. The First Call FY2009/FY2010 EPS estimates for UTX are $4.11 to $4.52.
Technically, United Technologies' stock chart is strong, with only a minor breach of the 50-day moving average during the summer. Place a 20 multiple (not unreasonable) on the 2010 earnings forecast and one can see how a high near $100 is plausible in the upcoming economic expansion.
Finally, the Sell/Stop Loss has been raised to $48, or to just above cost, from $33.
Stock Analysis: United Technologies is a moderate-risk stock. If you've already purchased the company's shares, hold them. If not, consider buying a 50% position in UTX now; then buy another 25% in one month, if U.S. and global economic conditions don't worsen substantially. Under any circumstance, don't buy more than 75% of your UTX position before December 2009. Revised Sell/Stop Loss if you bought shares in this company: $48.
Disclosure: Lazzaro has no positions in stocks, but does own shares in two Pimco Bond Funds: PHDAX and PYMAX.
Technically, United Technologies' stock chart is strong, with only a minor breach of the 50-day moving average during the summer. Place a 20 multiple (not unreasonable) on the 2010 earnings forecast and one can see how a high near $100 is plausible in the upcoming economic expansion.
Finally, the Sell/Stop Loss has been raised to $48, or to just above cost, from $33.
Stock Analysis: United Technologies is a moderate-risk stock. If you've already purchased the company's shares, hold them. If not, consider buying a 50% position in UTX now; then buy another 25% in one month, if U.S. and global economic conditions don't worsen substantially. Under any circumstance, don't buy more than 75% of your UTX position before December 2009. Revised Sell/Stop Loss if you bought shares in this company: $48.
Disclosure: Lazzaro has no positions in stocks, but does own shares in two Pimco Bond Funds: PHDAX and PYMAX.
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