- Honeywell became a diversified giant through its growth through acquisition strategy
- Despite cyclical pressures and inflationary headwinds, the company saw orders grow by 12%
- The company has repurchased shares for $3.2 billion
Diversified Technology and Manufacturing Company Honeywell (NYSE: HON) the stock is performing well and trading only (-7%) over the year. The industrial behemoth makes everything from propulsion engines, environmental control and electrical power systems, aircraft components, radar, data and software applications in his aerospace segment. His aircraft products can be found literally in every right. The companies COVID-19 personal protective equipment has an unprecedented demand. The company makes products in the technology, robotics, healthcare, retail, construction, software and security sectors.
Competition and strong stats
It competes with space giants like Boeing (NYSE: BA) and benefits from the trip recovery in this epicenter industry. It also faces competition from other industrial giants outside of aerospace, such as 3M (NYSE: MMM) and Emerson Electric (NYSE:EMR). The company is stable and profitable with a 2% dividend yield and over $11 billion in cash. Despite cyclical pressures and inflationary headwinds, the company saw 12% growth in orders with $29.5 billion in disadvantage, heading for a strong second half of the year. It has combined the DNA of a technology company with a mature and seasoned manufacturing and industrial giant. Investors seeking stable performance and diversification across multiple sectors to limit recession under pressure could take a look at Honeywell’s stock.
Honeywell became a diversified giant through its growth through acquisition strategy. However, the pace is calculated, slow and steady. The company consisted of four reporting segments, including Building Technologies, Performance Materials and Technologies, Safety and Productivity Solutions, and Aerospace being the largest. It is also a component stock of the Dow Jones Industrial Average (DJIA), along with 3M.
Slow but stable income
On July 19, 2022, Honeywell announced its second quarter 2022 results for the quarter ended June 2022. $2.07, a profit of $0.07). Revenues grew 1.6% year-over-year to $8.95 billion, better than analysts’ estimates of $8.67 billion. The wind down from Russian operations and declining sales of COVID-related masks had a (-3%) impact on earnings, despite 4% year-over-year organic sales growth, led by commercial aviation, construction products, productivity solutions, advanced detection technologies, advanced materials and the connected software activities. The company expanded its segment margin by 50 basis points to stay ahead of the inflation curve. The company conducted $3.2 billion in share repurchases to reduce its float to 685 million shares and is committed to another $4 billion in repurchases by 2022.
Flat Guidance Setting the Bar Low
Honeywell expected full-year 2022 EPS of between $8.55 and $8.80 against consensus analysts’ $8.69. Full-year revenue is expected to be between $35.5 billion and $36.1 billion, compared to analysts’ estimates of $35.97 billion. This could be a conservative estimate to set the bar low as the company expects a strong recovery in the second half. Stocks may have taken the lead, so it would be wise to wait for opportunistic pullback levels.
HON Entry Levels and Goals
Using the gun cards on the weekly and daily timeframes provides an accurate picture of the playing field for HON stocks. Weekly gun chart sharply reversed a breakout after hard rejection of the $206.14 Fibonacci (fib) level. The weekly gun chart breakdown bottomed out on weekly lower Bollinger Bands (BBs) at $167.05 before a reversal on the weekly market structure layer (MSL) buy trigger on the breakout above $182.89. The weekly 5-period moving average (MA) resistance has returned to a support as it rises to the 15-period weekly MA at $186.42 as it attempts a breakout. The 50-period weekly MA resistance is falling to $200.74. The weekly upper BBs are $209.27. The weekly stochastic bounced up through the 20 band to the 40 band, indicating an oversold bounce. However, the daily gun chart is overbought when the stochastic rides rise above the 90 band, meaning it’s best not to hunt for stocks. The daily uptrend has a rising 5-period MA support test at $191.37 as the $192.02 fib keeps the stock capped. The 200-period daily MA resistance is at $196.85 and the daily upper BBs are at $202.87. Cautious investors can watch for the daily stochastic to spike and reverse to opportunistic pullback levels at the $186.20 fib, $182.89 weekly MSL trigger, $177.91 fib, $174.42, $167.35 fib/swing low and the $161.79 fib. Upside targets range from the $202.52 level to the $223.69 fib level.