NEW YORK (TheStreet) -- United Technologies peaked in February and traded lower until August. Prices bounced but made a slightly lower low in September before UTX staged two short-term rallies to the upside, moving back above the 50-day simple Moving Average.
This first chart of UTX, above, also shows a good example of a bullish divergence with prices for UTX making lower lows but the momentum study making higher lows, indicating that the decline was slowing.
We get a different perspective on UTX from this chart, above. We have a neutral On-Balance-Volume line and a declining 40-week MA. The Moving Average Convergence Divergence oscillator is crossing, and the result of all this is that UTX could rally to the underside of the declining 40-week average or to around $110.
Separately, TheStreet Ratings team rates UNITED TECHNOLOGIES CORP as a Buy with a ratings score of B-. TheStreet Ratings Team has this to say about their recommendation:
We rate UNITED TECHNOLOGIES CORP (UTX) a BUY. This is driven by some important positives, which we believe should have a greater impact than any weaknesses, and should give investors a better performance opportunity than most stocks we cover. The company's strengths can be seen in multiple areas, such as its reasonable valuation levels, largely solid financial position with reasonable debt levels by most measures and notable return on equity. We feel its strengths outweigh the fact that the company has had sub par growth in net income.
Highlights from the analysis by TheStreet Ratings Team goes as follows:
- The debt-to-equity ratio is somewhat low, currently at 0.74, and is less than that of the industry average, implying that there has been a relatively successful effort in the management of debt levels. Despite the fact that UTX's debt-to-equity ratio is low, the quick ratio, which is currently 0.68, displays a potential problem in covering short-term cash needs.
- The return on equity has improved slightly when compared to the same quarter one year prior. This can be construed as a modest strength in the organization. Compared to other companies in the Aerospace & Defense industry and the overall market on the basis of return on equity, UNITED TECHNOLOGIES CORP has underperformed in comparison with the industry average, but has exceeded that of the S&P 500.
- UTX, with its decline in revenue, underperformed when compared the industry average of 1.5%. Since the same quarter one year prior, revenues fell by 14.7%. Weakness in the company's revenue seems to have hurt the bottom line, decreasing earnings per share.
- UNITED TECHNOLOGIES CORP's earnings per share declined by 21.1% in the most recent quarter compared to the same quarter a year ago. This company has reported somewhat volatile earnings recently. We feel it is likely to report a decline in earnings in the coming year. During the past fiscal year, UNITED TECHNOLOGIES CORP increased its bottom line by earning $6.82 versus $6.22 in the prior year. For the next year, the market is expecting a contraction of 8.3% in earnings ($6.25 versus $6.82).
- You can view the full analysis from the report here: UTX