Honeywell International (NYSE: HON) is the world’s largest provider of commercial and military avionics. It is being speculated that the aircraft industry and ancillary equipment makers are set to explode this year, putting Honeywell International in a good position for growth.
Earlier in 2014, Honeywell came up with a growth strategy plan of spending $10 billion on acquisitions in high growth areas over the next five years.
Chief Executive Officer Dave Cote said of the strategy, “Our expansion in key high-growth regions and ability to localize our capabilities is another great example of how we’ll drive accelerated growth over the next five years.”
In December, Honeywell maintained its forecast of $1.37 to $1.42 earnings per share for the fourth-quarter of 2014. On the other hand, the company decreased its revenue outlook for the quarter to between $10.1 billion to $10.2 billion, a drop from the prior outlook of $10.3 billion to $10.4 billion.
On December 31, Jefferies analyst Howard Rubel maintained a Buy rating on Honeywell and raised his price target from $105 to $115. He noted, “The EPS guidance range of $5.95-$6.15 generates 8-12% growth vs. our 2014 EPS estimate of $5.55, and compares to our estimate of $6.10. Organic revenue growth is estimated to be in the 3-4% range, but the adverse effect of currency translation and other items trims the advance to 2.5-2.75%. Margins on a reported basis, expand by about 120 bps, driven by restructuring taken in 2014 and the phasing of OEM incentives for Aerospace.”
In the past year, Rubel has successfully made 39 ratings out of 48 total, earning an 81% success rate recommending stocks and a +16.7% average return per recommendation.
Honeywell was also rated on December 16 by William Blair analyst Nicholas Heymann, who reiterated a Market Perform rating and a $104 price target. He reasoned, “Honeywell held its 2015 outlook conference call and provided 2015 EPS guidance of $5.95-$6.15 on reported sales growth of 1%-2% (up 4% organically), with reported operating margins rising 100-130 basis points, to 17.6%-17.9% (60-90 basis points organic).”
Heymann has successfully made 2 ratings out of 5 total over the past year, earning a 40% success rate recommending stocks and a +1.7% average return per recommendation.
On average, the top analyst consensus for Honeywell International on TipRanks is Strong Buy.
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