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Honeywell (HON) Gains But Lags Market: What You Should Know

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Honeywell (HON - Free Report) closed the most recent trading day at $150.17, moving +1.16% from the previous trading session. The stock lagged the S&P 500's daily gain of 2.12%. Elsewhere, the Dow gained 2.13%, while the tech-heavy Nasdaq added 2.64%.

Prior to today's trading, shares of the industrial conglomerate had lost 7.76% over the past month. This has was narrower than the Conglomerates sector's loss of 11.22% and lagged the S&P 500's loss of 4.4% in that time.

Investors will be hoping for strength from HON as it approaches its next earnings release, which is expected to be January 25, 2019. In that report, analysts expect HON to post earnings of $1.88 per share. This would mark year-over-year growth of 1.62%. Meanwhile, the Zacks Consensus Estimate for revenue is projecting net sales of $9.69 billion, down 10.61% from the year-ago period.

Looking at the full year, our Zacks Consensus Estimates suggest analysts are expecting earnings of $7.98 per share and revenue of $41.77 billion. These totals would mark changes of +12.24% and +3.05%, respectively, from last year.

Investors should also note any recent changes to analyst estimates for HON. These recent revisions tend to reflect the evolving nature of short-term business trends. As such, positive estimate revisions reflect analyst optimism about the company's business and profitability.

Research indicates that these estimate revisions are directly correlated with near-term share price momentum. Investors can capitalize on this by using the Zacks Rank. This model considers these estimate changes and provides a simple, actionable rating system.

Ranging from #1 (Strong Buy) to #5 (Strong Sell), the Zacks Rank system has a proven, outside-audited track record of outperformance, with #1 stocks returning an average of +25% annually since 1988. The Zacks Consensus EPS estimate has moved 2.07% lower within the past month. HON currently has a Zacks Rank of #4 (Sell).

Investors should also note HON's current valuation metrics, including its Forward P/E ratio of 18.6. Its industry sports an average Forward P/E of 17.7, so we one might conclude that HON is trading at a premium comparatively.

Also, we should mention that HON has a PEG ratio of 1.9. The PEG ratio is similar to the widely-used P/E ratio, but this metric also takes the company's expected earnings growth rate into account. The Diversified Operations industry currently had an average PEG ratio of 1.9 as of yesterday's close.

The Diversified Operations industry is part of the Conglomerates sector. This group has a Zacks Industry Rank of 190, putting it in the bottom 26% of all 250+ industries.

The Zacks Industry Rank includes is listed in order from best to worst in terms of the average Zacks Rank of the individual companies within each of these sectors. Our research shows that the top 50% rated industries outperform the bottom half by a factor of 2 to 1.

You can find more information on all of these metrics, and much more, on Zacks.com.




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