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New York • After pair of engine failures last quarter left United Technologies shares at the cheapest valuation in three years, trading in the options market suggests the stock is poised to rebound.

Bullish bets on the stock last week reached the most expensive level since 2008 relative to bearish ones, according to data on three-month options compiled by Bloomberg. There are 8 puts outstanding for every 10 calls on the Hartford, Conn.-based company, the lowest ratio since March.

United Technologies is moving past the malfunctions and will generate better profits over the next five years as it increases market share in aircraft engines, according to Tim Hoyle of Haverford Investments. The stock trades at 17.2 times reported profit, the lowest level since 2011 relative to other industrial companies in the Standard & Poor's 500 Index, data compiled by Bloomberg show.

"The recent selloff provides an entry point to the company," said Hoyle, director of research at Radnor, Pa.-based Haverford Investments. His firm oversees about $6 billion, including United Technologies shares. "UTX is easily worth $125 a share."

The company, which also makes Otis elevators and Carrier air conditioners, has seen its shares drop 5 percent this year to $108.09. Calls with a $115 strike price expiring in November have the highest ownership.

The stock has tumbled this year after the company reported a drop in sales and profit at its Pratt & Whitney unit after the division's engines were involved in a fire on a Bombardier CSeries jet in May and on a U.S. F-35 fighter in June. While companywide earnings beat analysts' estimates for the second quarter, operating profit in the Pratt unit fell 24 percent.

Calls betting on a 10 percent increase in United Technologies shares cost 4.8 points less than puts betting on a similar decline, three-month contracts show. The price relationship was minus 3.84 points on Aug. 11, the narrowest since June 2008. Over the past five years, the calls have been an average of 7.1 points cheaper than puts, according to data compiled by Bloomberg.

John Moran, a company spokesman, declined to comment on the options trading.

United Technologies will see free cash flow growth of 7 to 9 percent over the next five years as it expands sales of geared turbofan aircraft engines, according to Hoyle of Haverford Investments.

Paul Adams, president of Pratt, said in July that the company has a backlog of more than 6,000 orders for its geared turbofan. The company has received orders for the engine from companies such as Airbus and Mitsubishi Aircraft.

Profitability at its Otis elevator unit will be a challenge and higher pension expenses will probably restrain United Technologies shares, according to Cai Von Rumohr, an analyst at Cowen Group. He cut his rating on the stock to market perform, the equivalent of hold, from outperform on Aug. 12.

"The stock may offer more attractive re-entry when visibility of EPS growth reacceleration comes into focus," he wrote in a note to clients.

The issues that led to the engine failures are isolated incidents and will be fixed at relatively low costs, Jim Kelleher, an analyst at Argus Research in New York, wrote in a July 25 note to clients. He forecasts the stock will appreciate 22 percent to $132 over the next year, making him the fourth most-bullish analyst out of 17 covering the company, according to data compiled by Bloomberg.

Earnings growth at the company is poised to accelerate. Profits will probably rise an average of 18 percent in third and fourth quarter, about double the pace for companies in the broader S&P 500, analyst estimates compiled by Bloomberg show.

"United Technologies is set to deliver really strong results operationally in the second half," Brian Langenberg, an analyst at Langenberg & Co. in Chicago, said in an Aug. 12 phone interview. "It's a name that every portfolio manager in the second half is going to want to own. It'll deliver results and look good for them."

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