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Honeywell Unveils Enterprise Performance Management Solution

Zacks Equity Research

Honeywell International Inc. HON recently announced the launch of a new software category — Enterprise Performance Management for Operations Technology. Developed as a cost-effective solution to implement, Enterprise Performance Management will enable companies from various industries to improve the process of collecting and analyzing data from their operations and act on it.

Dubbed as Honeywell Forge, the software solution will utilize the company’s industry leading asset and process control technology to help owners and operators of buildings, industrial facilities and airlines to boost operational efficiency. Notably, Honeywell Forge uses large quantities of data from equipment, processes as well as people and converts them into actionable insights that improves enterprise operations monitoring system. As a matter of fact, this will optimize efficiency as well as improve resource management and safety of users’ businesses.

With the help of predictive analytics, Honeywell Forge enables users to detect maintenance issues, reduce costs and boosts worker’s efficiency. Also, the company is working on adding the latest cybersecurity protections into the software solution.

The company announced the availability of Honeywell Forge for Buildings. Notably, the solution is designed to avoid unplanned downtime and provide advanced predictive information to make building facilities safer and more secure. Further, it will reduce operating expenses of business owners and operators, enhance consumption of energy as well as improve space optimization management across a building portfolio.

In addition, the company plans to expand the software solution and introduce new products across various industries including Honeywell Forge for Industrials, Honeywell Forge for Airlines, Honeywell Forge for Inspection Rounds and Honeywell Forge Cybersecurity.

Our Take

Strength in automation and process solutions businesses is likely to boost revenues in the Performance Materials and Technology segment. Honeywell believes that solid demand for its warehouse automation, sensing and IoT businesses will aid its Safety and Productivity Solutions’ revenues. Further, strength in the company’s commercial aftermarket and sensing businesses is likely to boost Aerospace revenues. Also, strong demand for commercial fire and security products particularly in India and China is likely to drive the Building Technologies segment.

Over the past three months, the company's shares have gained 12.4%, outperforming  industry’s gain of 2.9%.

Honeywell has progressed with its portfolio transformation strategy, having declared spin-off dividends of shares of Resideo. The company has also completed the divestment of Garrett Motion Inc. In 2018, the company reorganized its operating segments by divesting Transportation Systems business as well as the Homes and ADI Global Distribution business. In addition, the company acquired the German company — Transnorm — in November 2018. These tactical initiatives will help it concentrate on high-growth industrial businesses, which will boost sales.

Zacks Rank & Other Key Picks

Honeywell currently carries a Zacks Rank #2 (Buy).

Some other top-ranked stocks from the same space are Carlisle Companies Incorporated CSL, Federal Signal Corporation FSS and General Electric Company GE. While Carlisle sports a Zacks Rank #1 (Strong Buy), Federal Signal and General Electric carry a Zacks Rank #2. You can see the complete list of today’s Zacks #1 Rank stocks here.

Carlisle outpaced estimates thrice in the preceding four quarters, the average earnings surprise being 19.07%.

Federal Signal surpassed estimates in each of the preceding four quarters, the average positive earnings surprise being 21.75%.

General Electric outpaced estimates twice in the preceding four quarters, the average positive earnings surprise being 5.56%.

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