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Honeywell International Inc HON

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Morningstar’s Analysis

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While Honeywell’s Sales Guidance Came in Light, We’re Optimistic About the Company's Future

Joshua Aguilar Equity Analyst

Analyst Note

| Joshua Aguilar |

Wide-moat Honeywell reported a mixed third quarter. That said, we raise our fair value estimate to $225 per share from $211, which is directionally opposite of the market’s reaction (and good for just over a 6.5% increase to intrinsic value). We’re unconcerned with the long-term implications of supply chain disruptions on Honeywell’s long-term prospects. If anything, the only portion of Honeywell’s revenue that we consider “lost” comes from rapidly declining, margin-dilutive personal respirator sales, which only helps Honeywell’s long-term profitability. The rest of the fair value increase is due to time value of money and other slight, noncore adjustments.

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Company Profile

Business Description

Honeywell traces its roots to 1885 with Albert Butz’s firm, Butz-Thermo Electric Regulator, which produced a predecessor to the modern thermostat. Today, Honeywell is a global multi-industry behemoth with one of the largest installed bases of equipment. The firm operates through four business segments, including aerospace, building technologies, performance materials and technologies, and safety and productivity solutions. In recent years, the firm has made several portfolio changes, including the addition of Intelligrated in 2016, as well as the spins of Garrett Technologies and Resideo in 2018. In 2019, the firm launched Honeywell Forge, its enterprise performance management software solution that leverages the firm's domain expertise in buildings, airlines, and critical infrastructure.

300 South Tryon Street
Charlotte, NC, 28202
T +1 704 627-6200
Sector Industrials
Industry Conglomerates
Most Recent Earnings Sep 30, 2021
Fiscal Year End Dec 31, 2021
Stock Type Cyclical
Employees 103,000