UTX - Embedded Expectations Analysis - 2018 09 06
United Technologies Corporation (UTX:USA) currently trades near recent averages relative to UAFRS-based (Uniform) Earnings, with a 19.3x Uniform P/E. At these levels the market has fairly bullish expectations for the firm, but management has concerns about rising input costs, Otis and their military segmentSpecifically, management may be concerned about the impact of tariffs on their input prices. Additionally, they may lack confidence in their ability to improve the durability of their wing components while reducing costs, and may be concerned that expected tailwinds won't be enough to help them meet tougher comps in H2 2018. Furthermore, they may lack confidence in their ability to drive long term profit growth and improve Otis margins. Also, they may lack confidence in their ability to improve the service portfolio within Otis and to maintain strong sales. Moreover, management may lack confidence in their ability to sustain elevated growth levels, and may be exaggerating their expectations for growth in their military engine business
United Technologies provides technology products and services to the building systems and aerospace industries. The company has four segments: Otis, which designs, manufactures, sells and installs passenger and freight elevators; Carrier, which provides heating, ventilating, air conditioning refrigeration, fire, security and building automation products; Pratt & Whitney, which supplies aircraft engines for the commercial, military, business jet and general aviation market; and Collins Aerospace Systems, which provides aerospace products and aftermarket service solutions for aircraft manufacturers, airlines, regional, business and general aviation markets, military, space and undersea operations.
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