UTX - Embedded Expectations Analysis - 2018 12 10
United Technologies Corporation (UTX:USA) currently trades near recent averages relative to UAFRS-based (Uniform) Earnings, with a 17.9x Uniform P/E. At these levels the market has fairly bullish expectations for the firm, but management has concerns about trade discussions between the United States and China, cost headwinds, and deleveraging their balance sheetSpecifically, management may be concerned about the impact of political tensions between the United States and China, and about macroeconomic trends in Korea. Furthermore, they may be concerned about foreign exchange headwinds driven primarily by the euro and Chinese yuan, and may lack confidence in their ability to offset increased labor and material costs. Additionally, they may lack confidence in their ability to deleverage their balance sheet over the next two to three years, and to meet their free cash flow targets
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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