Honeywell to modernize Kunsan air base
On January 3, Honeywell (HON) announced that it had bagged a project to modernize the Kunsan Air Base, a US Air Force base in South Korea. The project is estimated at $28 million. Honeywell expects the project to be completed in November 2020.
Once the project is completed, the airbase is likely to consume 18% less energy and 7% less water. The project is estimated to generate ~$1.7 million in annual energy savings. As part of the project, HON will help in upgrading the building controls and also centralize management through its Enterprise Building Integrator (or EBI). Further, there will be lighting improvements and water conservation measures.
John Rajchert, HON’s president for Building Solutions, said, “The changes and updates we’re able to provide Kunsan aim to not only improve its mission readiness, but help to improve the quality of life and work environment for the brave men and women on the base. The upgraded solutions and better visibility into building-level energy usage will help Kunsan greatly improve its environmental impact and fuel usage, helping it to be more energy resilient in its remote location.”
HON’s stock performance
In 2018, HON stock fell 10% and underperformed the S&P 500, which also declined by 6.25%. At present, HON is trading 12% below its 100-day moving average price of $147.86. HON’s organic growth and spin-offs could help the stock post positive returns in 2019. Analysts have projected HON’s target price to be at $169.21, which implies a return potential of 30% over the closing price of January 3, 2019.
Investors can indirectly hold HON by investing in the Industrial Select Sector SPDR Fund (XLI), which invests 4.3% of its portfolio in HON. The fund also provides exposure to Boeing (BA), 3M (MMM), and United Technologies (UTX) with weights of 8.1%, 5.25%, and 4.2%, respectively.