Honeywell (NYSE: HON) is set to report its Q2 2024 results on July 25, with expected revenue of $9.45 billion and adjusted earnings of $2.42 per share, slightly above consensus estimates. The company is likely to benefit from increased aftermarket services for commercial aerospace. Despite strong Q2 expectations, Honeywell stock is seen as appropriately priced around $215. Honeywell’s stock performance has been volatile, with little change over recent years compared to the S&P 500 index.
Honeywell’s stock has underperformed the S&P 500 in recent years, with returns of -2% in 2021, 3% in 2022, and -2% in 2023. The Trefis High Quality Portfolio has outperformed the index consistently, showing better returns with less risk. The current macroeconomic environment with high oil prices and elevated interest rates poses uncertainty for Honeywell’s stock performance in the next 12 months. Valuation-wise, HON stock looks poised for higher levels, with an estimated valuation of $227 per share.
In the previous quarter, Honeywell reported revenue of $9.1 billion, up 3% year-over-year, driven by growth in Aerospace and Energy & Sustainability Solutions sales. Industrial Automation and Building Automation sales saw declines. Operating margins expanded to 20.4%, resulting in adjusted earnings of $2.25 per share. In the upcoming quarter, Aerospace is expected to continue driving sales growth, while weaknesses in other segments may persist. Honeywell anticipates a slight expansion in overall segment margins for 2024.
While HON stock shows potential for higher levels, it is essential to consider how Honeywell’s peers compare on important metrics. Peer comparisons provide valuable insights into how Honeywell fares within its industry. Overall, Honeywell’s Q2 performance is anticipated to be led by its Aerospace business, with growth expected in other segments in the future quarters. Despite some challenges in the warehouse and workflow solutions business, Honeywell remains optimistic about its overall performance in 2024.
