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Honeywell International Inc HON

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Economic Moat




Honeywell's Historically Tough Second Quarter Shouldn't Discourage Long-Term Investors

Joshua Aguilar Equity Analyst

Analyst Note

| Joshua Aguilar |

Wide-moat-rated Honeywell had a historically tough second quarter, and management’s commentary on the call struck a downtrodden tone. The stock was flat on the news and we don’t expect to materially change our fair value estimate of $162 per share, though it could rise by $2 due to the time value of money. None of this was particularly surprising to us, given that a clear majority of Honeywell’s business faces severe economic headwinds in the commercial aerospace, oil and gas, and commercial building end markets. Honeywell’s top line decreased 18% year over year on an organic basis (with an additional 1-point headwind for currency), while segment margins (non-GAAP) contracted 280 basis points. 

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Company Profile

Business Description

Honeywell traces its roots to inventor Albert Butz’s company, the Butz-Thermo Electric Regulator Co. in 1885, which produced a predecessor to the modern thermostat. From its origins developing climate control technology, which still operates today, Honeywell has emerged as a sprawling conglomerate with operations that span the globe. Today, it operates through four business segments--aerospace, building technologies, performance materials and technologies, and safety and productivity solutions--increasingly transforming itself into a software-industrial company serving diverse end markets like the U.S. defense, e-commerce, and oil and gas industries.

300 South Tryon Street
Charlotte, NC, 28202
Sector Industrials
Industry Specialty Industrial Machinery
Most Recent Earnings Jun 30, 2020
Fiscal Year End Dec 31, 2020
Stock Type High Yield
Employees 113,000