Honeywell’s Valuations Surpass Its Peer’s Valuations
As of August 15, 2017, Honeywell’s one-year forward PE multiple stood at 18.30x—compared to United Technologies’ one-year forward PE multiple of 17.0x.
Among the 19 analysts, 79% of the analysts recommended a “buy” on Honeywell, 21% recommended a “hold,” and none recommended a “sell.”
So far, Honeywell’s investors must be satisfied with the kind of returns that it has generated in 2017. Honeywell continued its staggering performance.
Honeywell bagged two new airline clients with its GoDirect software. Brussels Airlines and Air Serbia will use Honeywell’s connected aircraft software.
During Jeffrey Immelt’s 16-year tenure as GE’s CEO, the company delivered a return of 1.5% on an annual basis.
General Electric’s 2Q17 earnings per share, on a GAAP basis, fell 53.3% to $0.14 from $0.30 in 2Q16.
On August 1, 2017, John Flannery took the reins as General Electric’s (GE) CEO from Jeffrey Immelt, the firm’s former CEO.
On August 14, Berkshire Hathaway divulged the details of its 13F filed for 2Q17. Warren Buffett’s behemoth firm liquidated its holdings in General Electric (GE) during the quarter.
On August 8, 2017, KBC Securities reduced its target price for Euronav (EURN) stock to $7.3 from $8.0 and gave it a rating of “accumulate.”
Crude tanker companies like Euronav, Frontline, Nordic American Tankers, Teekay Tankers, and DHT Holdings are highly leveraged, which makes their balance sheets vital.
Euronav’s (EURN) operating cash flow in 2Q17 was $59 million, compared with $74 million in the previous quarter.
In 1H17, Euronav’s vessel operating expenses made up ~27% of its total operating expenses, while voyage expenses made up 11%.
What Euronav highlighted as positive factors have been overshadowed by one negative factor: order books.
Euronav (EURN) recorded revenues of $126 million in 2Q17—lower than the $164 million it recorded in 1Q17.
Euronav’s revenues and EBITDA both fell in 2Q17. But the second quarter was challenging for the entire crude tanker industry.
Kimberly-Clark’s (KMB) 2016 net sales fell 2.0% due to declines in every segment.
U.S. Steel’s valuation multiples seem on the low side after looking at the known headwinds and tailwinds. The markets seem to be factoring in a lot of negatives.
Better-than-expected demand and supply-side reforms have boosted Chinese steel prices this year. However, most analysts see a downside risk.
Since the Section 232 investigation could have a considerable impact on US steel markets, there’s been a wait-and-watch attitude from both buyers and sellers.
Steel prices have shown no signs of softening so far in the second half of 2017. In fact, US steel mills recently pushed for price hikes.