What’s Happening With Honeywell Stock?

HON: Honeywell logo

Honeywell stock (NYSE: HON) reported its Q2 results last week, with revenue and earnings comfortably above ours and the street estimates. HON stock has rallied around 6% in a week, while it’s up 11% in a month. After the recent rise, we believe HON stock has only a little room for growth, as discussed below.

The company reported revenue of $9.0 billion (up 2% y-o-y) and EPS of $2.10 (up 4% y-o-y) in Q2, compared to our estimates of $8.6 billion and $2.00, respectively. The revenue growth was led by a 9% rise in Building Solutions sales and mid-single-digit growth for Aerospace, and Performance Materials & Technologies revenue, more than offsetting a 12% fall in Safety & Productivity Solutions segment sales, due to lower demand for PPE.

Based on solid results, the company raised its full-year outlook. It now expects its revenue to rise 5% to 7% (vs. 4% to 7% earlier) and adjusted EPS to be between $8.55 and $8.80, up from its previous guidance of the $8.50 and $8.80 range. An upbeat quarter and raised outlook boded well with the investors, evident from the stock price appreciation.

Relevant Articles
  1. Up 5% In A Week Does Honeywell Stock Have More Room For Growth?
  2. Is An Earnings Beat In The Cards For Honeywell?
  3. Should You Pick Honeywell Stock After A 5% Fall This Year?
  4. Will Honeywell Stock See Higher Levels After A 15% Fall This Year?
  5. Which Is A Better Pick – Honeywell Stock Or Travelers?
  6. Which Is A Better Pick – Honeywell Stock Or Amgen?

We estimate Honeywell’s Valuation to be $210, which is just 9% above the current market price of $193. This represents a P/E multiple of 24x based on our EPS forecast of $8.90 in 2022 (slightly higher than the company’s provided outlook), compared to the last three-year average of 25x.

Now that HON stock has seen a rise of 11% in a month, will it continue its upward trajectory, or is a fall imminent? Going by historical performance, there is a higher chance of a rise for HON stock over the next month. HON stock has seen a rise of 11% or more in a month 59 times in the last ten years. Of those, 36 resulted in HON stock rising over the subsequent one-month period (twenty-one trading days). This historical pattern reflects 36 out of 59, or about a 61% chance of a rise in HON stock over the next month. See our analysis of Honeywell Stock Chance of Rise for more details.

Calculation of ‘Event Probability‘ and ‘Chance of Rise‘ using the last ten years’ data

  • After moving 6% or more over five days, the stock rose on 53% of the occasions in the next five days.
  • After moving 11% or more over ten days, the stock rose on 50% of the occasions in the next ten days.
  • After moving 11% or more over a twenty-one-day period, the stock rose on 61% of the occasions in the next twenty-one days.

This pattern suggests an equal chance of a rise or a fall in HON stock over the next ten days, while it has a higher chance of an increase over the next five and twenty-one days.

Honeywell (HON) Return (Recent) Comparison With Peers

  • Five-Day Return: ROK highest at 15.2%; MOG.A lowest at -1.2%
  • Ten-Day Return: ROK highest at 23.7%; MOG.A lowest at -0.1%
  • Twenty-One Day Return: ROK highest at 29.5%; MOG.A lowest at 1.9%

While HON stock looks like it has only a little room for growth, it is helpful to see how Honeywell’s Peers fare on metrics that matter. You will find other valuable comparisons for companies across industries at Peer Comparisons.

Furthermore, the Covid-19 crisis has created many pricing discontinuities which can offer attractive trading opportunities. For example, you’ll be surprised how counter-intuitive the stock valuation is for 3M vs. AGCO.

With inflation rising and the Fed raising interest rates, among other factors, HON stock has fallen 7% this year. Can it drop more? See how low Honeywell stock can go by comparing its decline in previous market crashes. Here is a performance summary of all stocks in previous market crashes.

What if you’re looking for a more balanced portfolio instead? Our high-quality portfolio and multi-strategy portfolio have beaten the market consistently since the end of 2016.

Returns Aug 2022
MTD [1]
YTD [1]
Total [2]
 HON Return 0% -7% 74%
 S&P 500 Return 0% -13% 84%
 Trefis Multi-Strategy Portfolio 0% -13% 241%

[1] Month-to-date and year-to-date as of 8/1/2022
[2] Cumulative total returns since the end of 2016

Invest with Trefis Market-Beating Portfolios
See all Trefis Price Estimates