September 28, 2012 at 09:33 AM EDT
United Technologies Downgraded to “Perform” at Oppenheimer; 2013 Rebound Not as Likely (UTX)

Industrial manufacturer United Technologies Corporation (UTX) on Friday caught a big downgrade from analysts at Oppenheimer & Co.

The firm cut its rating on UTX from “Outperform” to “Perform” and removed its $87 price target from the stock.

An Oppenheimer analyst commented, “Our enthusiasm for UTX hinged on the belief that a messy 2012–marked by the acquisition of GR and IAE and various asset dispositions–would position UTC for faster growth and margin expansion in 2013. We’re no longer so sure.”

Continuing, “The industrial businesses are stuck in the funk in China and Europe. The commercial-aero businesses are facing potentially protracted softness in aftermarket. And DoD headwinds could take a bite out of military revenues. We don’t see much downside to shares (given ~9% FCF yield in 2013), but neither do we see many catalysts to justify a premium to the current market multiple.”

UTX shares fell 75 cents, or -1%, in premarket trading Friday.

The Bottom Line
Shares United Technologies (UTX) have a 2.73% dividend yield, based on last night’s closing stock price of $78.35. The stock has technical support in the $72-$75 price area. If the shares can firm up, we see overhead resistance around the $82-$83 price levels.

United Technologies Corporation (UTX) is not recommended at this time, holding a Dividend.com DARS™ Rating of 3.3 out of 5 stars.

Be sure to visit our complete recommended list of the Best Dividend Stocks, as well as a detailed explanation of our ratings system here.

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