uploads/2017/08/part-3-Recommendations-1.png

Most Analysts Suggest a ‘Buy’ on Honeywell

By

Updated

Analysts’ consensus

The number of analysts actively covering Honeywell (HON) stock fell from 21 analysts to 19 analysts since June 2017. Among the 19 analysts from different brokerage houses, 79% of the analysts recommended a “buy,” 21% recommended a “hold,” and none of the analysts recommended a “sell.”

Analysts’ consensus indicates that Honeywell’s 12-month target price is $144.22, which implies a potential return of 4.9% over the closing price of $137.42 as of August 15, 2017. Analysts increased Honeywell’s consensus target from $139.50 last month.

Article continues below advertisement

Why analysts recommend a “buy”

Honeywell posted strong 2Q17 earnings and reported EPS (earnings per share) of $1.80, which beat analysts’ estimate of $1.78. Honeywell raised the lower end of its EPS for fiscal 2017 to $7.0–$7.10 compared to the earlier guidance of $6.90–$7.10. As a result, most of the analysts have recommended the stock as a “buy.”

Target prices by individual brokerage firms

  • Morgan Stanley (MS) has raised its target price on Honeywell to $145.00, which implies a potential return of 5.5% over the closing price of $137.42 on August 15.
  • Credit Suisse (CS) increased its target price on Honeywell to $139, which implies a potential return of 1.10% from the closing price of $137.42 as of August 15, 2017.
  • Oppenheimer recommended a target price of $155 on Honeywell, which reflects a potential return of 12.80% over the closing price of $137.42 as of August 15, 2017.

Investors can hold Honeywell indirectly by investing in the PowerShares Aerospace & Defense Portfolio (PPA). PPA has invested 6.70% of its portfolio in Honeywell. The fund’s other top holdings include Boeing (BA) and Lockheed Martin (LMT) with weights of 7.70% and 7.0%, respectively, as of August 15, 2017.

In the next part, we’ll discuss Honeywell’s latest valuations compared to its peers.

Advertisement

More From Market Realist