On Jan 27, we have reaffirmed our Neutral recommendation on
diversified business conglomerate
Honeywell International Inc
) backed by its healthy fourth-quarter 2013 results. The company
recorded solid year-over-year growth in both earnings and
revenues for the quarter. Honeywell also comfortably beat the
respective Zacks Consensus Estimate for the quarter. However,
adverse foreign currency translations and volatility in commodity
prices force us to remain on the sidelines.
CRANE CO (CR): Free Stock Analysis Report
CARLISLE COS IN (CSL): Free Stock Analysis
HONEYWELL INTL (HON): Free Stock Analysis
HUTCHINSON WHAM (HUWHY): Get Free Report
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Honeywell's diversified business portfolio has the potential to
earn consistent above-average returns and mitigate operating
risks. The company's diligent focus on working capital
management, free cash flow generation and a conservative balance
sheet remain key positive attributes amid a challenging
We remain encouraged by management's continued efforts to launch
products and technologies in order to drive organic growth and
expand business in new geographical regions. Additionally,
management's effort to drive margin expansion is also
praiseworthy. Operational improvements coupled with strong
productivity and lucrative investments are expected to contribute
to margin expansion in the long run.
However, given its international presence, the company often
faces unfavorable foreign currency movements, impacting its
top-line growth. Any future slowdown in the global economy or the
manufacturing industry as a whole will have an adverse impact on
its business, and would hamper its long-term growth potential.
Over the last 7 days, the Zacks Consensus Estimate for 2014 has
decreased by a penny to $5.52. For 2015, the estimates have
remained constant at $6.12 over the same period. However, we
expect the earnings estimates to move up gradually and prefer to
remain at the middle-of-the-road for Honeywell.
Other Stocks to Consider
Honeywell currently has a Zacks Rank #3 (Hold). Other stocks that
look promising and are worth a look include
Hutchison Whampoa Ltd
Carlisle Companies Inc.
), each having a Zacks Rank #2 (Buy).