The firm said the technology company's 2015 consensus earnings per share estimate of $7.64 is too high, and lowered its 2015 EPS to $7.25 from $7.45, and its valuation range for shares to $110-$115 from $128-$132.
United Technologies reported stronger than expected second quarter earnings, but Wells Fargo said in its note that "nothing stood out as exceptional, and 2014 cash flow guidance was reduced."
Separately, TheStreet Ratings team rates UNITED TECHNOLOGIES CORP as a Buy with a ratings score of A. TheStreet Ratings Team has this to say about their recommendation:
Highlights from the analysis by TheStreet Ratings Team goes as follows:
- Despite its growing revenue, the company underperformed as compared with the industry average of 3.1%. Since the same quarter one year prior, revenues slightly increased by 2.4%. This growth in revenue does not appear to have trickled down to the company's bottom line, displayed by a decline in earnings per share.
- Net operating cash flow has significantly increased by 92.36% to $1,335.00 million when compared to the same quarter last year. The firm also exceeded the industry average cash flow growth rate of 43.40%.
- The debt-to-equity ratio is somewhat low, currently at 0.62, 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 0.70, displays a potential problem in covering short-term cash needs.
- Compared to where it was a year ago today, the stock is now trading at a higher level, regardless of the company's weak earnings results. Looking ahead, unless broad bear market conditions prevail, we still see more upside potential for this stock, despite the fact that it has already risen over the past year.
- UNITED TECHNOLOGIES CORP's earnings per share declined by 5.0% in the most recent quarter compared to the same quarter a year ago. This company has reported somewhat volatile earnings recently. But, we feel it is poised for EPS growth in the coming year. During the past fiscal year, UNITED TECHNOLOGIES CORP increased its bottom line by earning $6.22 versus $5.35 in the prior year. This year, the market expects an improvement in earnings ($6.85 versus $6.22).
- You can view the full analysis from the report here: UTX Ratings Report