UTX has ended December higher nine times over the past 10 years
It's been a rough day for blue chip United Technologies Corporation (NYSE:UTX) down 5.7% to trade at $120.56. Driving the stock lower is the announcement that the company will split into three separate entities: aerospace, elevators, and building divisions. It is one of the biggest companies ever to pursue such a split, and has been under scrutiny from investors to separate. UTX also said it completed its purchase of Rockwell Collins.
Jefferies chimed in, noting the move could create near-term pressure on the shares, but ultimately bring long-term stability. More short-term headwinds is hardly what United Technologies stock needs, having already shed 14% this quarter. However, the Dow stock could start to claw back in December, if past is prologue, as UTX tends to outperform in the final month of the year.
According to data from Schaeffer's Senior Quantitative Analyst Rocky White, UTX is one of the 25 best S&P 500 stocks to own in December. Looking back 10 years, the stock boasts a 90% win rate, and has an average rate of return of 3%. This means United Technologies stock has been the best Dow stock to own next month, historically speaking.
Today's drop takes United Technologies stock below its year-to-date breakeven point. Overall, UTX has given back 16% since its Sept. 21 high of $144.15. However, today's downside is being contained near the $119 level, an area that supported the shares back in late October.
Meanwhile, analyst sentiment remains bullish, despite the recent choppy trading. Of the 11 brokerages covering UTX, nine rate it a "buy" or better, with zero "sells" on the books. What's more, the stock's average 12-month price target of $150.25 sits in uncharted territory for the Dow name.