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Valued at a market cap of $137.8 billion, Honeywell International Inc. (HON) engages in aerospace technologies, industrial automation, building automation, and energy and sustainable solutions businesses. The Charlotte, North Carolina-based company provides solutions across various industries like residential, commercial, industrial, and automotive sectors, essentially focusing on safety, comfort, and security through its technology offerings.
Companies valued at $10 billion or more are typically classified as “large-cap stocks,” and Honeywell fits the label perfectly, with its market cap exceeding this mark, underscoring its size, influence, and dominance within the conglomerates industry. The company has a leading position in aerospace and defense, providing avionics, engines, and safety systems for both commercial and military applications. Its key strengths lie in technological innovation, a diversified business model, and strong brand reputation. With a focus on R&D, digital transformation, and sustainability, Honeywell continues to drive growth in high-tech, high-margin industries.
This multi-industry giant is currently trading 12.7% below its 52-week high of $242.77, reached on Nov. 12, 2024. Moreover, shares of HON have declined 6.6% over the past three months, underperforming the Nasdaq Composite’s ($NASX) 5.8% fall during the same time frame.
In the longer term, Honeywell has gained 6.7% over the past 52 weeks, lagging behind NASX’s nearly 12.8% return. Moreover on a YTD basis, shares of HON are down 6.1%, compared to NASX’s 5% decline over the same time frame.
To confirm its bearish trend, HON has been trading below its 200-day moving average since early February, and is trading below its 50-day moving average since early January, with slight fluctuations.
On Feb. 6, shares of HON fell 5.6% following its Q4 earnings results despite delivering stronger-than-expected Q4 adjusted earnings of $2.47 per share and revenues of $10.1 billion. Moreover, the top line grew 6.9% year-over-year. However, earnings declined 8.2% from the prior-year quarter due to lower profitability across nearly all segments.
What disappointed investors the most was Honeywell’s fiscal 2025 guidance. The company expects sales between $39.6 billion and $40.6 billion and adjusted EPS in the range of $10.10 to $10.50, both below Wall Street estimates, contributing to the stock's decline.
On that day, Honeywell also announced plans to fully separate its Automation and Aerospace Technologies divisions. The move is intended to streamline operations and create more focused, agile businesses, each positioned for stronger growth and innovation in their respective industries.
HON’s underperformance looks even more pronounced when compared to its rival, 3M Company (MMM), which rallied 100.4% over the past 52 weeks and almost 18.9% on a YTD basis.
Despite Honeywell’s recent underperformance relative to the Nasdaq, analysts remain moderately optimistic about its prospects. The stock has a consensus rating of “Moderate Buy” from the 22 analysts covering it, and the mean price target of $240.25 suggests a modest 13.3% premium to its current levels.
