HON - Embedded Expectations Analysis - 2021 08 20
Honeywell International Inc. (HON:USA) currently trades above historical averages relative to UAFRS-based (Uniform) earnings, with a 37.7x Uniform P/E. At these levels, the market is pricing in bullish expectations for the firm, but management may have concerns about life cycle solutions and services demand, the pace of narrow body flight hours recovery, and their financial guidance.Specifically, may lack confidence in their ability to hit their EPS projections, reduce fixed costs, and meet cash flow guidance. Furthermore, management may have concerns about pricing headwinds, the pace of recovery of narrow body flight hours, and the sustainability of life cycle solutions and services demand. Moreover, they may lack confidence in their ability to develop hardware-agnostic software solutions and a unique quantum operating system, advance technology while simultaneously driving commercialization, and effectively automate mask production. Also, they may be concerned about PMT margins, uncertainty regarding virus case rates, and their growth trajectory over the next two years. Finally, management may be exaggerating their position in click-and-collect consumer buying as well as the potential of future e-commerce sales growth.
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.
In 2009, just as the dust was settling from the last major equity and credit market crises, we launched a boutique research firm with the intention of breaking Wall Street’s biases and broken incentives:
- 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
We sought to provide investors and company analysts with a source of information that changed all that.
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
- Stock analysts continue to make recommendations with deeply inherent biases
- 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
The integrity of Valens Research is founded in our disciplined processes and analytics. No “star” analysts. No corporate advisory relationships. No-nonsense opinions and recommendations.
Unfortunately, this report is not available for the investor type or country you selected.
Browse all ResearchPool reportsReport is subscription only.
Thank you, your report is ready.
Thank you, your report is ready.