Morgan Stanley On United Technologies' Lowered Revision: 'It's Just Math'

Loading...
Loading...
United TechnologiesUTX
on Monday lowered its fiscal 2015 earnings per share outlook from $7.00 to $7.20 to $6.85 to $7.05 while reducing its sales expectations from $66 billion to $67 billion to $65 billion to $66 billion due to a strong U.S. dollar outlook. Nigel Coe of Morgan Stanley on Tuesday commented in a note that the company's revised guidance fully absorbs 24c of additional headwind from foreign exchange and assumes a Euro rate of $1.10 – the most conservative estimate Coe has seen this earnings season. “The lowered guidance range is likely to overshadow a pretty robust operating performance that pretty much hit the consensus bulls-eye,” Coe wrote. “Organic growth came in at four percent as predicted, but the company was facing a tough comp and sluggish top-line has been a major theme since the beginning of this recovery.” Coe also notes that a six percent decline in Pratt aftermarket sales deserved “special attention” as it contrasts the 25 percent plus commercial aftermarket orders
General ElectricGE
reported. Bottom line, “the stock was not priced for a negative revision and so the stock likely resets following a strong run,” Coe also wrote while pointing out the upcoming March 12 investor day is a potential catalyst event. Shares are Overweight rated with an unchanged $128 price target.
Loading...
Loading...
Posted In: Newsforeign exchangeMorgan StanleyNigel CoePratt Whitneyunited technologiesUS Dollar
We simplify the market for smarter investing

Trade confidently with insights and alerts from analyst ratings, free reports and breaking news that affects the stocks you care about.

Join Now: Free!

Loading...