Analyst consensus on Honeywell
The number of analysts tracking Honeywell (HON) has fallen gradually. Of the 19 analysts currently covering HON, 74% of the analysts have recommended a “buy” on the stock, 26% have recommended a “hold,” and none of the analysts recommended a “sell” on Honeywell.
The analyst consensus target for Honeywell has been projected at $168.44, which is 6.4% over the closing price of $158.54 as of January 22, 2018. In the past three months, HON’s target price has made an upward journey from $153 to the current target price, which indicates that analysts continue to be bullish on Honeywell.
Why analysts are bullish
Honeywell announced the spin-off of its Homes Products portfolio, its ADI Global Distribution business, and its Transportation Systems business, together valued at $7.5 billion. The spin-off is expected to take place at the end of 2018 and is expected to add value for investors. Further, the positive earnings per share guidance for 2018, which is expected to be in the range of $7.55 to $7.80 excluding spin-off charges and continued share buybacks, is all set to increase value for shareholders. This explains why analysts are recommending the stock as a “buy” or “hold.”
Individual broker recommendations and target prices
- Oppenheimer raised its target price for Honeywell to $168.00, which implies a return potential of 5.9% over the closing price as of January 22, 2018.
- JPMorgan Chase (JPM) gave Honeywell a target price of $167.0, which implies a return potential of 5.2% over the closing price as of January 22, 2018.
- RBC rated Honeywell as a “perform” and recommended a target price of $158. However, HON is already trading above the recommended target price as of January 22, 2018.
Investors looking for indirect exposure to Honeywell can invest in the iShares U.S. Industrials ETF (IYJ), which has invested 3.4% of its portfolio in Honeywell. The fund also provides exposure to Boeing (BA), 3M (MMM), and General Electric (GE), which have weights of 5.3%, 4.1%, and 3.9%, respectively, as of January 22, 2018.