CFRA, an independent research provider, has provided MT Newswires with the following research alert. Analysts at CFRA have summarized their opinion as follows:
We lower our 12-month target to $200 from $210, 19.1x our 2024 EPS estimate of $10.48 (lowered from $10.51; 2023 raised to $9.16 from $9.08), in line with HON’s pre-pandemic 2018-2019 forward P/E average to reflect higher-than-usual forecasting uncertainty amid rising interest rates and global macro issues. HON posted Q3 adj-EPS of $2.27 vs. $2.25 (+1% Y/Y), beating consensus by $0.04. We attribute the beat to better-than-anticipated margin execution (operating margin +140 bps Y/Y), on positive impacts from productivity actions within Honeywell Building Tech. The top line for Q3 expanded by 3% Y/Y (+2% organically), reflecting robust sales growth in Aerospace (+18% organic; 38% of total Q3 sales) with strength in both commercial aviation and defense activity. We expect Aerospace to remain the growth engine within HON’s portfolio looking to 2024, more than offsetting softness seen in Safety and Productivity (-25% organic; 14% of sales). We see recovery in HON’s shorter cycle businesses as a swing factor.