Morgan Stanley Expects Good Things from United Technologies Corporation 2Q14 Report

In a report published Tuesday, Morgan Stanley analyst Nigel Coe reiterated an Overweight rating and $129.00 price target on

. In the report, Morgan Stanley noted, “Our 2Q14e EPS of $1.72 stands 2c above cons, which incl. 11c of items, 12% Y/Y growth on a comparable basis. We see organic growth slightly moderating to 4.6% vs. 5.1% in 1Q, driven by Otis (-1ppt Q/Q), CCS (-1ppt, Transicold & R/HVAC deceleration) & Sikorsky (-7ppts Q/Q), partly offset by 3ppts Q/Q step-up at Pratt on weaker comps. We see Otis China orders decelerating to ~10% in 2Q (vs. +25% in 1Q) on China property market, but expect Comm. Aero OEM & A/M orders to remain solid and commentary on US gov't orders to suggest stable/improving trends vs. 1Q (-2% Y/Y). We also forecast 100bps Y/Y core margin expansion driven by CCS, Pratt & UTAS, partly offset by Otis (mix & pricing headwinds) and Sikorsky (assuming $16m losses on CMH shipments).” United Technologies Corporation closed on Tuesday at $114.88.