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When Should You Buy Honeywell International Inc (NYSE:HON)?

Hector Vargas

Honeywell International Inc (NYSE:HON) saw significant share price volatility over the past couple of months on the NYSE, rising to the highs of $164.99 and falling to the lows of $146.02. This high level of volatility gives investors the opportunity to enter into the stock, and potentially buy at an artificially low price. A question to answer is whether Honeywell International’s current trading price of $151.23 reflective of the actual value of the large-cap? Or is it currently undervalued, providing us with the opportunity to buy? Let’s take a look at Honeywell International’s outlook and value based on the most recent financial data to see if there are any catalysts for a price change. Check out our latest analysis for Honeywell International

What is Honeywell International worth?

According to my valuation model, Honeywell International seems to be fairly priced at around 10% above my intrinsic value, which means if you buy Honeywell International today, you’d be paying a relatively reasonable price for it. And if you believe that the stock is really worth $137.58, then there isn’t really any room for the share price grow beyond what it’s currently trading. Furthermore, Honeywell International’s share price also seems relatively stable compared to the rest of the market, as indicated by its low beta. This may mean it is less likely for the stock to fall lower from natural market volatility, which suggests less opportunities to buy moving forward.

What does the future of Honeywell International look like?

NYSE:HON Future Profit Mar 9th 18

Future outlook is an important aspect when you’re looking at buying a stock, especially if you are an investor looking for growth in your portfolio. Buying a great company with a robust outlook at a cheap price is always a good investment, so let’s also take a look at the company’s future expectations. Honeywell International’s earnings over the next few years are expected to double, indicating a very optimistic future ahead. This should lead to stronger cash flows, feeding into a higher share value.

What this means for you:

Are you a shareholder? HON’s optimistic future growth appears to have been factored into the current share price, with shares trading around its fair value. However, there are also other important factors which we haven’t considered today, such as the financial strength of the company. Have these factors changed since the last time you looked at the stock? Will you have enough conviction to buy should the price fluctuates below the true value?

Are you a potential investor? If you’ve been keeping an eye on HON, now may not be the most optimal time to buy, given it is trading around its fair value. However, the positive outlook is encouraging for the company, which means it’s worth further examining other factors such as the strength of its balance sheet, in order to take advantage of the next price drop.

Price is just the tip of the iceberg. Dig deeper into what truly matters – the fundamentals – before you make a decision on Honeywell International. You can find everything you need to know about Honeywell International in the latest infographic research report. If you are no longer interested in Honeywell International, you can use our free platform to see my list of over 50 other stocks with a high growth potential.

To help readers see pass the short term volatility of the financial market, we aim to bring you a long-term focused research analysis purely driven by fundamental data. Note that our analysis does not factor in the latest price sensitive company announcements.

The author is an independent contributor and at the time of publication had no position in the stocks mentioned.