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Honeywell (HON) Outpaces Stock Market Gains: What You Should Know

Zacks Equity Research

In the latest trading session, Honeywell (HON) closed at $155.04, marking a +1% move from the previous day. This change outpaced the S&P 500's 0.7% gain on the day. Meanwhile, the Dow gained 0.58%, and the Nasdaq, a tech-heavy index, added 0.69%.

Heading into today, shares of the industrial conglomerate had gained 2.09% over the past month, lagging the Conglomerates sector's gain of 2.78% and outpacing the S&P 500's gain of 1.95% in that time.

Investors will be hoping for strength from HON as it approaches its next earnings release. In that report, analysts expect HON to post earnings of $1.83 per share. This would mark a year-over-year decline of 6.15%. Our most recent consensus estimate is calling for quarterly revenue of $8.63 billion, down 16.98% from the year-ago period.

HON's full-year Zacks Consensus Estimates are calling for earnings of $7.95 per share and revenue of $36.83 billion. These results would represent year-over-year changes of -0.75% and -11.9%, respectively.

Any recent changes to analyst estimates for HON should also be noted by investors. Recent revisions tend to reflect the latest near-term business trends. As a result, we can interpret positive estimate revisions as a good sign for the company's business outlook.

Our research shows that these estimate changes are directly correlated with near-term stock prices. To benefit from this, we have developed the Zacks Rank, a proprietary model which takes these estimate changes into account and provides an actionable rating system.

The Zacks Rank system ranges from #1 (Strong Buy) to #5 (Strong Sell). It has a remarkable, outside-audited track record of success, with #1 stocks delivering an average annual return of +25% since 1988. Over the past month, the Zacks Consensus EPS estimate has moved 0.04% lower. HON currently has a Zacks Rank of #3 (Hold).

Looking at its valuation, HON is holding a Forward P/E ratio of 19.32. This represents a premium compared to its industry's average Forward P/E of 15.95.

Also, we should mention that HON has a PEG ratio of 2.16. This metric is used similarly to the famous P/E ratio, but the PEG ratio also takes into account the stock's expected earnings growth rate. The Diversified Operations was holding an average PEG ratio of 1.84 at yesterday's closing price.

The Diversified Operations industry is part of the Conglomerates sector. This industry currently has a Zacks Industry Rank of 44, which puts it in the top 18% of all 250+ industries.

The Zacks Industry Rank gauges the strength of our industry groups by measuring the average Zacks Rank of the individual stocks within the groups. Our research shows that the top 50% rated industries outperform the bottom half by a factor of 2 to 1.

Be sure to follow all of these stock-moving metrics, and many more, on Zacks.com.

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