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Honeywell International (HON) Sheds 1% Ahead of Earnings: What To Expect

Shares of Honeywell International (HON) lost 1% during regular hours Thursday, the last day of trading before it releases its latest quarterly earnings report. Investors displayed hesitation ahead of the report, but this is certainly still a stock to watch once the full results are in.

Shares of Honeywell International HON lost 1% during regular hours Thursday, the last day of trading before it releases its latest quarterly earnings report. Investors displayed hesitation ahead of the report, but this is certainly still a stock to watch once the full results are in.

Honeywell performed strongly in its last earnings report, beating expectations across the board and raising its guidance on the year. Analysts expect revenue growth across all of the conglomerate’s sectors. Although HON is exposed to the effects of the steel and aluminum tariffs, management claims business has not taken a major hit. Investor eyes will be on the firm’s report, because if it beats on revenue, it will represent a new all-time Q2 growth record for the company.

According to our latest Zacks Consensus Estimates, analysts expect Honeywell to report earnings of $2.01 per share on $10.78 billion in revenue. These results would mark year-over-year growth rates of 11.7% and 6.9%, respectively.

Investors should also note that HON’s consensus earnings projection has trended upward over the course of the quarter. Estimates for this quarter, next quarter, this fiscal year, and next fiscal year all sit a cent higher today than they did a month ago. This positive revision activity has contributed to the stock’s Zacks Rank #2 (Buy).

Looking at share price performance, HON has added about 9.3% over the past year. However, the stock has performed poorly as of late, losing nearly 4% on a year-to-date basis. More recently, shares have dropped about 2% over the trailing 12 weeks.

A strong earnings beat might be what HON needs in order to get back on track. To gauge how likely the company is to outperform estimates tomorrow morning, we can turn to our exclusive Earnings ESP figure.

Zacks Earnings ESP (Expected Surprise Prediction) compares the Most Accurate Estimate to the Zacks Consensus Estimate for the quarter. The Most Accurate Estimate is a version of the Zacks Consensus whose definition is related to change.

This is done because, generally speaking, when an analyst posts an estimate right before an earnings release, it means that they have fresh information which could potentially be more accurate than what analysts thought about a company two or three months ago.

A positive Earnings ESP paired with a Zacks Rank #3 (Hold) or better ranking helps us feel confident about the potential for an earnings beat. In fact, our 10-year backtest has revealed that this methodology has accurately produced a positive surprise 70% of the time.

HON currently has an Earnings ESP of 0.16%. This, combined with its Zacks Rank, leaves us optimistic about its chances at beating earnings estimates on Friday. It is also worth noting that Honeywell has notched 9 quarters of earnings outperformance in a row.

Make sure to check back here for our full analysis once Honeywell reports!

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