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These Analysts Sat Down With Honeywell's Security Subsidiary; Here's What Happened

Jim Swanson

In a report published Monday, Imperial Capital analyst Jeff Kessler discussed the key takeaways from the investor meeting held with the senior executives of Honeywell Security Group (HSG), a subsidiary of Honeywell International, Inc. (NYSE: HON) on July 8.

HSG is part of the company's Automation and Controls Solutions (ACS) business. "ACS offers environmental and combustion, and sensing controls, security and life safety products and services, scanning and mobility devices, and building solutions and services for homes, commercial buildings, and industrial facilities," Kessler explained.

The ACS segment is expected to grow at an annual rate of 4-5 percent over the coming several years. Honeywell has seen a continuous increase in demand for its "smart" solutions, from both prospective and current commercial and residential customers. "We estimate that 50 percent of the customers are commercial and 50 percent are residential, with about 65 percent of the sales coming from the Americas region," the Imperial Capital report stated.

With Honeywell continuing to focus on its home automation platform over the past two years, the stock valuation has risen meaningfully.

"The new Honeywell thermostat (Lyric Thermostat) is highly comparable to the Nest thermostat. With an increased focus on the connected home over the last three years, we believe the Honeywell Security Group will continue to garner more attention as a sleek hardware manufacturer with a growing offering of software, security, and data encryption solutions," Kessler added.

Latest Ratings for HON

Date Firm Action From To
Apr 2015 Nomura Initiates Coverage on Neutral
Jan 2015 JP Morgan Maintains Overweight
Jan 2015 Barclays Maintains Overweight

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