HON - Embedded Expectations Analysis - 2019 05 06
Honeywell International Inc. (HON:USA) currently trades above historical averages relative to UAFRS-based (Uniform) Earnings, with a 26.1x Uniform P/E, implying bullish expectations for the firm. Additionally, management is confident about their margins, order growth, and that they are not facing the same headwinds as their competitors.Specifically, management is confident in their margin growth rate, ability to increase installed base business margins, and order backlog growth in the engineering, equipment, and catalyst segments. Moreover, they are confident in the benefits of their buybacks and that they are not facing the same headwinds as their competitors. In addition, they are confident in their ability to increase SPS margin independent of Intelligrated growth rates, and in the cash generation discipline of unconventional players.
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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- GAAP and IFRS have failed to provide rules for reliable financial statement reporting
- Stock analyst recommendations are not grounded in disciplined financial analysis
- Credit agencies have been set up to grossly fail in their responsibilities to investors and the public markets
- Utter lack of willingness of major research firms to employ the the most advanced forensic analysis available
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Many years later, our business model remains because little has changed on Wall Street.
- Corporate credit ratings remain years behind the fundamental underpinnings of company performance
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- Research firms have failed to break down the walls between credit, equity, and macroeconomic research
- The governing accounting bodies have created more leeway for mis-estimates and mis-classifications as financials have become unwieldy and overwhelming
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