Bernstein Cuts United Technologies Outlook, Sees No Catalysts

Bernstein issued a company report on United Technologies Corporation

amid a lack of positive catalysts after the company posted lower than expected Q2 earnings results. Bernstein downgraded United Technologies from Outperform to Market-Perform and lowered their price target from $116 to $104. Douglas Harned and Finbar Sheehy, analysts at Bernstein, wrote, "Although we see little downside at the current valuation, which is near trough levels, we do not see a catalyst in the next 6-12 months to move the stock higher….In the near term, expectations are weak and margins appear set to decline during the next few years…" Analysts at Bernstein noted three negative catalysts for United Technologies' stock going forward: 1. Weaker end markets for the company's commercial businesses 2. More difficult performance issues that developed under prior management combined with a need to further invest in product development 3. Longer timeframe for management to gain control of key operational issues Overall, Bernstein believes that United Technologies may be hurt by weakening Chinese and European markets which could put pressure on revenue growth and margin expansion. Furthermore, analysts believe that the aircraft manufacturing industry is becoming increasingly competitive which increases the need for research and development and further weighs on the company's profitability. Currently, United Technologies is trading at $91.32, down 0.65 percent.