November 8, 2017

HON – Market expectations are for record-high Uniform ROA, but management has concerns about margins and organic growth


  • Honeywell International Inc. (HON:USA) currently trades near recent highs relative to UAFRS-based (Uniform) Earnings, with a 21.9x Uniform P/E, implying fairly bullish expectations for the firm. However, management has concerns about margins and organic growth
  • Specifically, management appears concerned about the sustainability of margin expansion in their Performance Materials and Technologies segment, and segment-wide profit improvement. They may also lack confidence in their ability to maintain organic growth rates through Q4 and in their ability to drive 20% organic growth in their Workflow business
To read this Embedded Expectations Analysis report in its entirety, please log into the Valens Research web app. If you don't have an account, you can sign up for the 30-day trial.