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Honeywell International (HON)
:HON
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Honeywell International
(NASDAQ:HON)68Neutral
Positive Factors
Organic Growth
Honeywell's organic sales increased by 2% with significant growth in defense, space, and building solutions, indicating broad-based long-cycle strength.
Portfolio Transition
The announced separation of Aerospace and Automation segments could unlock value by creating more focused entities.
Negative Factors
Financial Guidance
The FY25 outlook and 1Q guidance are both below the Street's expectations, indicating potential challenges ahead.
Honeywell International (HON) vs. S&P 500 (SPY)
Market Cap
$135.18B
Dividend Yield2.08%
Average Volume (3M)4.47M
Price to Earnings (P/E)23.9
Beta (1Y)0.69
Revenue Growth5.05%
EPS Growth2.73%
CountryUS
Employees102,000
SectorIndustrials
Sector Strength66
IndustryIndustrial Conglomerates
Share Statistics
EPS (TTM)8.71
Shares Outstanding649,918,600
10 Day Avg. Volume4,738,584
30 Day Avg. Volume4,473,321
Financial Highlights & Ratios
PEG Ratio8.74
Price to Book (P/B)N/A
Price to Sales (P/S)3.58
Price to Cash Flow (P/CF)15.10
P/FCF Ratio16.20
Enterprise Value/Market CapN/A
Enterprise Value/RevenueN/A
Enterprise Value/Gross ProfitN/A
Enterprise Value/EbitdaN/A
Forecast
1Y Price Target
$238.79Price Target Upside14.80% Upside
Rating ConsensusModerate Buy
Number of Analyst Covering16
Honeywell International Business Overview & Revenue Model
Company DescriptionHoneywell International Inc. is a diversified technology and manufacturing company that operates in multiple sectors including aerospace, building technologies, performance materials and technologies, and safety and productivity solutions. The company provides innovative products and services ranging from aerospace systems and industrial products to advanced materials and building automation solutions.
How the Company Makes MoneyHoneywell International makes money through the sale of its diversified portfolio of products and services across its four main business segments. In aerospace, Honeywell provides integrated avionics, engines, systems, and service solutions for aircraft manufacturers, airlines, and defense and space contractors. The building technologies segment offers products and services that enhance energy efficiency, building safety, and security, including automation and control systems. The performance materials and technologies segment produces high-performance specialty materials, process technologies, and automation solutions for the refining, petrochemical, and other industries. Lastly, the safety and productivity solutions segment provides personal protective equipment, sensors, and productivity solutions. Honeywell's revenue streams are supported by strong partnerships with key industry players and a focus on innovation and sustainability.
Honeywell International Financial Statement Overview
Summary
Honeywell International exhibits a strong financial position with consistent revenue and profit growth, efficient operations, and solid cash flow generation. While the balance sheet is stable, further debt reduction could enhance financial flexibility. Overall, the company maintains a healthy financial trajectory in the industrial conglomerates sector.Income Statement
Honeywell International demonstrates strong revenue growth with a 5.0% increase in TTM. The gross profit margin improved to 38.3%, indicating effective cost management. Net profit margin remained stable at 14.8%, reflecting consistent profitability. EBIT and EBITDA margins are robust at 19.8% and 22.2%, respectively, showcasing efficient operational performance.85
Very Positive
Balance Sheet
The balance sheet is well-structured with a debt-to-equity ratio of 1.1, showing moderate leverage. Return on Equity (ROE) is impressive at 21.4%, indicating strong shareholder returns. The equity ratio of 35.5% suggests a solid capital structure, though there is room for improvement in reducing debt levels.75
Positive
Cash Flow
Operating cash flow is solid at $6.1 billion, providing a healthy 1.1x coverage of net income. Free cash flow growth is strong at 14.7%, driven by efficient capital expenditure management. The free cash flow to net income ratio stands at 0.9, indicating substantial cash generation relative to profits.80
Positive
| Breakdown | ||||
| Dec 2024 | Dec 2023 | Dec 2022 | Dec 2021 | Dec 2020 |
|---|---|---|---|---|
| Income Statement | Total Revenue | |||
| 38.50B | 36.66B | 35.47B | 34.39B | 32.64B | Gross Profit |
| 14.66B | 13.67B | 11.64B | 11.00B | 10.47B | EBIT |
| 7.21B | 7.55B | 6.79B | 7.58B | 6.37B | EBITDA |
| 9.61B | 8.73B | 8.00B | 8.80B | 7.37B | Net Income Common Stockholders |
| 5.71B | 5.66B | 4.97B | 5.54B | 4.78B |
| Balance Sheet | Cash, Cash Equivalents and Short-Term Investments | |||
| 10.95B | 8.10B | 10.11B | 11.52B | 15.22B | Total Assets |
| 1.36B | 61.52B | 62.27B | 64.47B | 64.59B | Total Debt |
| 32.23B | 21.54B | 19.57B | 19.60B | 22.38B | Net Debt |
| 21.66B | 13.61B | 9.94B | 8.64B | 8.11B | Total Liabilities |
| 408.00M | 45.08B | 44.95B | 45.22B | 46.79B | Stockholders Equity |
| 957.00M | 15.86B | 17.32B | 19.24B | 17.79B |
| Cash Flow | Free Cash Flow | |||
| 4.93B | 4.30B | 4.51B | 5.14B | 5.30B | Operating Cash Flow |
| 6.10B | 5.34B | 5.27B | 6.04B | 6.21B | Investing Cash Flow |
| -10.16B | -1.29B | -93.00M | -1.06B | -987.00M | Financing Cash Flow |
| 6.84B | -5.76B | -6.33B | -8.25B | -81.00M |
Honeywell International Technical Analysis
Negative
208.00
Price Trends
217.51
Negative
218.76
Negative
211.09
Negative
Market Momentum
-1.99
Negative
42.10
Neutral
44.64
Neutral
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For HON, the sentiment is Negative. The current price of 208 is below the 20-day moving average (MA) of 209.56, below the 50-day MA of 217.51, and below the 200-day MA of 211.09, indicating a bearish trend. The MACD of -1.99 indicates Negative momentum. The RSI at 42.10 is Neutral, neither overbought nor oversold. The STOCH value of 44.64 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for HON.
Honeywell International Risk Analysis
Honeywell International disclosed 17 risk factors in its most recent earnings report. Honeywell International reported the most risks in the “Finance & Corporate” category.
Finance & Corporate - Financial and accounting risks. Risks related to the execution of corporate activity and strategy
Latest Risks Added 0 New Risks
Honeywell International Peers Comparison
Overall Rating
UnderperformOutperform
Sector (62)
Financial Indicators
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
77 Outperform | $27.28B | 10.22 | 38.79% | 1.03% | -2.99% | 159.26% | |
74 Outperform | $64.30B | 27.12 | 9.14% | 1.80% | 10.29% | 22.72% | |
74 Outperform | $213.34B | 33.27 | 33.90% | 0.55% | -32.60% | -28.55% | |
68 Neutral | $135.18B | 23.89 | 596.13% | 2.08% | 5.05% | 2.73% | |
66 Neutral | $31.51B | 34.67 | 26.22% | 1.84% | -11.28% | -23.69% | |
64 Neutral | $84.21B | 20.53 | 108.62% | 1.84% | -18.72% | ― | |
62 Neutral | $8.11B | 13.34 | 1.17% | 3.02% | 4.16% | -15.14% |
* Industrials Sector Average
Performance Comparison
HON
Honeywell International
208.00
14.75
7.63%
MMM
3M
145.86
70.09
92.50%
DOV
Dover
184.06
18.58
11.23%
EMR
Emerson Electric Company
114.03
6.95
6.49%
GE
GE Aerospace
198.77
73.70
58.93%
ROK
Rockwell Automation
267.87
-14.53
-5.15%
Honeywell International Earnings Call Summary
Earnings Call Date: Feb 6, 2025 | % Change Since: -5.95% | Next Earnings Date: Apr 24, 2025
Earnings Call Sentiment Neutral
The earnings call presented a balanced view with key highlights in record backlog and strategic initiatives like the separation plan and Bombardier agreement, while acknowledging challenges in margins, macroeconomic conditions, and short-cycle demand.Highlights
Exceeded Guidance for Q4 2024
Honeywell finished 2024 on a positive note, meeting or exceeding the high end of guidance for organic sales growth and adjusted earnings growth in the fourth quarter.
Record Backlog and Orders
Honeywell's backlog reached a record level of $35.3 billion, growing 11% year-over-year, with orders increasing 11% organically from the prior year.
Strategic Separation Plan
Honeywell announced a strategic move to separate into three industry-leading public companies: Honeywell Automation, Honeywell Aerospace, and Advanced Materials, aiming to unlock significant value.
Bombardier Agreement
Landmark agreement with Bombardier to provide next-gen avionics, propulsion, and satellite communications technology, valued at $17 billion over its lifetime.
Strong Free Cash Flow Guidance
Honeywell expects free cash flow between $5.4 billion and $5.8 billion in 2025, with plans to deploy $3 billion to reduce share count by at least 1%.
Lowlights
Lower Margin Expansion
Segment margins declined 70 basis points from the previous year when excluding the Bombardier impact, with margin pressure driven by contraction in industrial automation.
Challenging Macroeconomic Environment
The company faces challenges from evolving geopolitical situations, challenging global macroeconomic conditions, and tempered demand expectations in some end markets.
Impact of Bombardier Agreement on Cash Flow
Fourth quarter free cash flow declined 27% primarily due to cash contributions related to the Bombardier agreement.
Muted Short-Cycle Demand
Continued muted demand for short-cycle products expected through 2025, particularly in Europe and China.
Significant Below-the-Line Pressure
Anticipation of $0.52 negative pressure on 2025 EPS from below-the-line items, including $0.33 from higher interest expenses.
Company Guidance
During the Honeywell Fourth Quarter 2024 Earnings Conference Call, the company provided guidance for the first quarter and full year 2025, highlighting several key metrics. Honeywell expects 2025 organic sales growth of 2% to 5%, with sales projected between $39.6 billion and $40.6 billion. The company plans to deploy over $25 billion of capital through 2025, following $14 billion deployed in 2024, including acquisitions. Segment margin is anticipated to expand by 60 to 100 basis points, with adjusted earnings per share projected between $10.10 and $10.50, marking a 2% to 6% increase. Honeywell forecasts free cash flow between $5.4 billion and $5.8 billion. Additionally, Honeywell announced the planned separation of its Automation and Aerospace divisions into independent companies by the second half of 2026, resulting in three focused entities, including the previously announced spin-off of Advanced Materials.Honeywell International Corporate Events
Executive/Board Changes
Honeywell Announces Executive Changes Amid Leadership Transition
Neutral
Feb 18, 2025
On February 14, 2025, Honeywell International announced significant executive changes. Ms. Robin L. Washington will resign from the board to assume a leadership role at Salesforce, Inc., without any conflict regarding Honeywell’s operations. Mr. Mike Stepniak will become Senior Vice President and Chief Financial Officer, effective February 17, 2025, succeeding Mr. Gregory P. Lewis, who will transition to Senior Vice President, Transformation and Senior Advisor.
Glossary
OutperformA stock rated as "Outperform" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock is likely to deliver higher returns compared to the average returns of other stocks in the same sector or market index. Investors might consider this stock a good buying opportunity.
NeutralA stock rated as "Neutral" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly attractive nor unattractive for investment. Investors may consider holding onto the stock, as it is not expected to either significantly outperform or underperform the market.
UnderperformA stock rated as "Underperform" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock may deliver lower returns compared to the average returns of other stocks in the same sector or market index. Investors might consider selling the stock or avoiding it as an investment.
Disclaimer
This AI Analyst Stock Report is automatically generated by our AI systems using advanced algorithms and publicly available financial, technical, and market data. While the information provided aims to be accurate and insightful, it is intended for informational purposes only and should not be considered financial advice. Any content created by an AI (Artificial Intelligence) system may contain inaccuracies and/or contain errors. Investing in stocks carries inherent risks, and past performance is not indicative of future results. This report does not account for your personal financial circumstances, objectives, or risk tolerance. Always conduct your own research or consult with a qualified financial advisor before making investment decisions. The analysis and recommendations provided are based on historical and current data and may not fully reflect future market conditions or unexpected developments. Neither the creators of this report nor its affiliated entities guarantee the accuracy, completeness, or reliability of the information presented. Use this report at your own discretion and risk.