Honeywell (HON) is Undervalued Relative to Aerospace, Controls Potential - Barron's
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Price: $194.79 --0%
Rating Summary:
15 Buy, 16 Hold, 1 Sell
Rating Trend:
Up
Today's Overall Ratings:
Up: 7 | Down: 5 | New: 3
Rating Summary:
15 Buy, 16 Hold, 1 Sell
Rating Trend:
Up
Today's Overall Ratings:
Up: 7 | Down: 5 | New: 3
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Honeywell (NYSE: HON) is seeing pressure Friday amid a positive look from Barron's issued late Thursday night.
According to Barron's, Honeywell is worth a second look. The company, which recently reported third-quarter, consensus-beating EPS of $1.20 in October, should be able to benefit from the ongoing secular trends like energy efficiency and air travel. Aside from the good earnings, Honeywell also demonstrated the ability to keep expanding margins and bolster is aerospace business. One Credit Value Fund manager also sees the aerospace division being a growth driver over the long haul.
The stock is up about 16 percent for 2012, versus a 12.5 percent gain for the S&P 500. At 12.4 times forward earnings, Honeywell is below its historical average of 14 to 15 times earnings and also cheaper than its peer group average of 13 times.
Honeywell is expanding its controls business, which could see upside as the emphasis on making buildings "greener" continues to take hold. Another analyst noted how the only real money being spent on commercial real estate is retrofitting for improvement and efficiency, a niche Honeywell is making a name for itself in.
In automotive, Honeywell is also a key player in the turbocharger market, allowing clients like Caterpillar (NYSE: CAT) and Ford (NYSE: F) to make more fuel-efficient, yet powerful, vehicles.
Honeywell, like most of its peers, would still take a hit should the macro picture worsen any. In addition, investors might be wary after the stock reached new highs recently, looking for a little more clarity on future plans before driving the stock higher.
Barron's notes that CEO David Cote may issue conservative guidance at its upcoming investors' conference, being known as one who likes to under-promise and over deliver. Any pullback might be a good entry point for investors.
Honeywell shares are down about in early trading Friday.
According to Barron's, Honeywell is worth a second look. The company, which recently reported third-quarter, consensus-beating EPS of $1.20 in October, should be able to benefit from the ongoing secular trends like energy efficiency and air travel. Aside from the good earnings, Honeywell also demonstrated the ability to keep expanding margins and bolster is aerospace business. One Credit Value Fund manager also sees the aerospace division being a growth driver over the long haul.
The stock is up about 16 percent for 2012, versus a 12.5 percent gain for the S&P 500. At 12.4 times forward earnings, Honeywell is below its historical average of 14 to 15 times earnings and also cheaper than its peer group average of 13 times.
Honeywell is expanding its controls business, which could see upside as the emphasis on making buildings "greener" continues to take hold. Another analyst noted how the only real money being spent on commercial real estate is retrofitting for improvement and efficiency, a niche Honeywell is making a name for itself in.
In automotive, Honeywell is also a key player in the turbocharger market, allowing clients like Caterpillar (NYSE: CAT) and Ford (NYSE: F) to make more fuel-efficient, yet powerful, vehicles.
Honeywell, like most of its peers, would still take a hit should the macro picture worsen any. In addition, investors might be wary after the stock reached new highs recently, looking for a little more clarity on future plans before driving the stock higher.
Barron's notes that CEO David Cote may issue conservative guidance at its upcoming investors' conference, being known as one who likes to under-promise and over deliver. Any pullback might be a good entry point for investors.
Honeywell shares are down about in early trading Friday.
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