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Charlotte-based Honeywell International Inc. (HON) fuels progress across industries with its expertise in automation, aerospace, and sustainable energy. With a market cap of $148.9 billion, Honeywell spans technology and manufacturing, crafting everything from cockpit controls to warehouse robotics and energy solutions. Through its various segments - powered by its advanced Honeywell Forge software - the company tackles complex global challenges, investing in emerging tech and making the world smarter, safer, and greener.
Shares of the industrial giant rose 19.7% over the past 52 weeks, underperforming the broader S&P 500 Index ($SPX), which rallied nearly 30.6%. In 2024, HON is up 9.1%, lagging behind SPX’s 23.6% rise on a YTD basis.
Narrowing the focus, HON has underperformed the Industrial Select Sector SPDR Fund (XLI). The exchange-traded fund has gained 31.5% over the past 52 weeks and 21.9% on a YTD basis, surging past the gains of the industrial conglomerate.
Honeywell, a titan across aerospace, automation, and sustainability, has found itself in choppy waters despite its diversified portfolio. Once a market outperformer, HON stock now lags, climbing just 28.2% over five years compared to the SPX's 87.6% rise. Sluggish earnings growth and uneven execution have weighed heavily on investor sentiment. While its 2024 acquisition spree totaling over $9 billion shows promise, Wall Street remains skeptical about whether it will deliver meaningful results soon.
The struggles were clear after Honeywell’s mixed Q3 earnings report on Oct. 24. Adjusted EPS rose 8% annually to $2.58, beating expectations, but revenue growth of 5.6% to $9.7 billion left analysts unimpressed.
Yet, Honeywell is not out of the game. Last week, the stock hit an all-time high of $242.77, spurred by news of activist investor Elliott Investment Management taking a $5 billion stake. But Elliott sees Honeywell’s sprawling conglomerate structure as a hindrance, advocating for simplification to unlock shareholder value. Their involvement has a reputation for sparking bold changes, adding intrigue to Honeywell’s next moves.
Despite underwhelming performance, Honeywell’s reliable dividends kept it afloat in 2024. With over two decades of consistent payouts, it raised its quarterly dividend by 4.6% to $1.13 per share, yielding 1.94%. This marked its 15th consecutive hike, showcasing a balanced payout strategy that rewarded investors while sustaining innovation, keeping HON stock in the green.
For the current fiscal year, ending in December, analysts expect Honeywell’s EPS to rise 11.4% to $10.20. The company’s earnings surprise history is impressive. It beat or matched the consensus estimate in each of the last four quarters.
HON stock has a consensus “Moderate Buy” rating overall. Among the 21 analysts in coverage, nine suggest a “Strong Buy,” and the remaining 12 analysts recommend a “Hold.”
This configuration is slightly less bullish than three months ago, with 12 analysts advising a “Strong Buy.”
Following Elliott’s investment news and push for a split, brokerage firms adjusted their outlook on Honeywell. UBS took the lead, upgrading the stock from "Neutral" to "Buy" with a bold target of $298, signaling a 30.2% upside potential. The firm sees big potential in Honeywell’s move to streamline its portfolio.
The mean price target of $236.10 implies that the stock could rally as much as 3.2%.
