Honeywell International (HON) Stock Forecast Before Its Q1 Earnings

Honeywell International (HON) is scheduled to release its earnings report for the first quarter of 2021 on April 23 before the market bell. What can investors expect from Honeywell’s earnings report? Should you buy HON stock before the earnings report?

Honeywell International is a diversified technology and manufacturing company. HON stock has gained 9 percent YTD and 71 percent over the last year.

In the first quarter, Wall Street analysts expect Honeywell to post sales of $8.1 billion, which would be 4.4 percent lower than $8.5 billion in sales in the first quarter of 2020. Analysts also expect Honeywell to post an adjusted EPS of $1.80 in the first quarter compared to $2.21 in the same quarter a year ago. In the fourth quarter of 2020, the company reported an adjusted EPS of $2.07 and sales of $8.9 billion.

On April 19 as of 9:08 a.m. ET, Honeywell stock was up 0.1 percent at $232.26. Many analysts have started turning positive on Honeywell stock recently. On April 9, J.P. Morgan analyst Stephen Tusa boosted Honeywell's target price to $250 from $200 and kept an overweight rating. According to The Fly, Tusa said, “The fundamental setup for Honeywell is as good as it gets cyclically for the next four years, while the company's market outgrowth initiatives and non-fundamental levers, namely a best-in-class balance sheet, are materially additive.”

On April 8, Deutsche Bank upgraded Honeywell to buy from hold, and also raised its target price to $244 from $222. The analyst views the first-quarter earnings results as a positive catalyst for the shares. The analyst sees a “rare opportunity” to buy the stock. Barclays raised Honeywell’s target price to $230 from $225 and maintained an overweight rating.

Honeywell stock pays an annual dividend of $3.72 per share with a dividend yield of 1.60 percent. In the first-quarter earnings results, the company is expected to report a dividend per share of $0.92.

According to estimates compiled by Market Beat, analysts' consensus target price is $213.14 for Honeywell stock, which is 8.2 percent below its current price. Among the 16 analysts tracking Honeywell, nine recommend a buy and seven recommend a hold. None of the analysts recommend a sell. The highest target price of $250 is 8 percent above the stock's current price, while the lowest target price of $160 is 31.1 percent below the stock's current price.

Honeywell's NTM EV-to-sales multiple is 4.9x, which looks attractive compared to its peers. Heico (HEI) and TransDigm Group (TDG) have NTM EV-to-sales multiples of 9.3x and 9.8x, respectively.

Honeywell’s business operations were hit hard by the COVID-19 pandemic. As the economy recovers, the company is expected to benefit. The company’s building technology segment is expected to benefit as more people go back to the office. In 2021, Honeywell expects to report sales in the range of $33.4 billion–$34.4 billion, up 1 percent–4 percent YoY. The company also expects its EPS in the range of $7.60–$8.00, up 7 percent–13 percent YoY.