BofA Securities Reiterates Buy Rating on Honeywell International (HON)
BofA Securities analyst Andrew Obin reiterated a Buy rating and $250.00 price target on Honeywell International (NASDAQ: HON)
The analyst comments "On 6/20, Honeywell announced it would acquire CAES from Advent International for $1.9bn. The all-cash transaction values CAES at 14x 2024E EV/EBITDA on a tax-adjusted basis, or ~15x (BofAe) excluding the tax benefit. We estimate ~$91mn in tax benefits to achieve the 14x multiple. The transaction is expected to close in 2H24 and would be accretive to EPS in the first full year after closing, with more meaningful accretion by 2026. We estimate a neutral to slightly negative (~$0.02 dilutive, or 0.2% headwind to EPS) impact on 2024E depending on the timing of the deal closure. We estimate $0.09 accretion in 2025, or ~0.8% uplift, and $0.15 accretion in 2026, or ~1.2% uplift. We believe the acquisition will be accretive to Honeywell Aero Technologies long-term segment growth target of MSD-HSD. We incorporate a ~7% organic growth CAGR through 2028. We are confident that the company can reach a ROIC of at least 10% by Year 5. We reiterate our Buy rating on Honeywell and view more proactive M&A as a positive."
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Shares of Honeywell International closed at $214.14 yesterday.