HON - Embedded Expectations Analysis - 2018 11 13
Honeywell International Inc. (HON:USA) currently trades above historical averages relative to UAFRS-based (Uniform) Earnings, with a 23.0x Uniform P/E, implying bullish expectations for the firm. However, management has concerns about meeting their growth targets, free cash flow and EPS results, and their Intelligrated and Transnorm businessesSpecifically, management may lack confidence in their ability to sustain growth of long-range orders and backlog. Moreover, they may lack confidence in their ability to drive growth in the Middle East, India, and Latin America, and may have concerns about their Transnorm acquisition. They may also be exaggerating their optimism about the growth of their Intelligrated business and their confidence that they acquired it at an appealing price, and may be concerned about potential sustained elevated restructuring cost levels through 2020. Furthermore, they may be exaggerating their confidence in their Aerospace segment outlook, and in their ability to maintain strong Connected Aircraft margins. In addition, they may have concerns about their Aerospace supply chain, and their ability to sustain growth in their Defense and Space business. They may also lack confidence in their ability to sustain growth of free cash flow and adjusted EPS, and to drive growth across their Performance Materials and Technologies segment. Finally, they may lack confidence in their ability to meet their organic growth expectations, and to improve their supply chain
Honeywell International is a technology and manufacturing company. The company has four segments: Aerospace, which supplies products, software and services for aircrafts; Honeywell Building Technologies, which provides products, software, solutions and technologies including building control and optimization, energy management, access control, video surveillance, fire products, and remote patient monitoring systems; Performance Materials and Technologies, which develops and manufactures chemicals and materials, process technologies and automation solutions; and Safety and Productivity Solutions, which provides products and software that improve productivity, workplace safety and asset performance.
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