If that increased demand causes the share price to appreciate, then the total market capitalization rises post-split. We arrive at an average intrinsic value for Raytheon Technologies (RTX) at $58.00 per share. United Technologies Corporation UTX moved a step forward toward the separation of its Otis and Carrier businesses into two independent companies, … “As standalone public companies, Carrier and Otis are each well-positioned to drive sustained growth and innovation, with more focused business strategies that will enable them to maximize value for their customers and shareowners.”, Hayes continued, “Executing the separations of Carrier and Otis is also a major milestone to completing the merger of UTC’s aerospace businesses with Raytheon to create Raytheon Technologies, the premier aerospace and defense systems and services provider. Carrier business provides heating, ventilating, air conditioning (HVAC), refrigeration, fire, security, and building automation products, solutions, and services for residential, commercial, industrial, and transportation applications. A September 2018 breakout attempt failed, yielding a steep fourth quarter rout, followed by 2019 upside that cleared resistance at $143 in November. DuPont de Nemours The assigned multiple is at a 3.9% discount to its median peer multiple. I am the author of the book Spin-Off to Pay-Off: An Analytical Guide to Corporate Divestitures (McGraw-Hill). This positioning is highly bullish, at least until the upper line rolls over and crosses the lower line. EV/EBITDA Valuation: We value Raytheon Technologies at $58.00 per share based on 2020e EV/ EBITDA multiple of 8.0x for Pratt & Whitney (~3% premium to its peer median multiple), 8.0x for Collins Aerospace (at ~10% premium to its peer median multiple), and 7.5x for Raytheon. Distribution and use of this material are governed by our Subscriber Agreement and by copyright law. Otis recorded sales of $13.1 billion in FY19. Wall Street, however, likes the Raytheon deal. With 2019 over, we are taking a look at all 30 stocks in the This does not always happen, however, often depending on the underlying fundamentals of the business. On November 26, 2018, United Technologies Corp. This copy is for your personal, non-commercial use only. The subsequent recovery wave completed a round trip into the prior high in 2011 but failed to clear resistance until 2013. United Technologies The assigned multiple is at a 9.7% discount to its median peer multiple. Elevator maker, to be called Otis, and air-conditioning company, to be called Carrier, will probably go the way of DuPont and Corteva. And, for a while, United Tech (UTX) stock trailed peers. Lockheed Martin “We are taking another important step in the transformation of UTC and the establishment of two independent companies that are leaders in their respective industries with attractive investment profiles,” said UTC Chairman and Chief Executive Officer Gregory Hayes. The stock is struggling to gain ground after reversing at channel resistance in November, but the monthly stochastics oscillator is fully engaged in a buy cycle that has crossed into the overbought zone. For FY19, the business delivered a subdued performance and we expect the business to have slightly lower revenue and EBIT growth over the next two years. The stock broke out above 1987 resistance at a split-adjusted $7.56 in 1993 and entered a powerful uptrend that posted impressive gains into the 1999 high at $37.99. Following the spin-offs of Otis and Carrier by United Technologies (UTX), the remaining company merged with Raytheon Co, and the combined company is named as Raytheon Technologies. VIAS Split History (DD) and Upon separation, each company has the strategic focus, nimbler organizational & operating model, and financial flexibility to deliver innovative customer solutions and drive long-term value. United Tech management won’t be more precise than that. Stock in aerospace and industrial peer I am the author of the book Spin. We initiate coverage on CARR with a ‘Buy’ rating and an implied upside of 27.1% from the current market price of $16.92 as on 4/3.
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