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Honeywell (HON) Stock Sinks As Market Gains: What You Should Know

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Honeywell (HON - Free Report) closed at $142.89 in the latest trading session, marking a -0.23% move from the prior day. This change lagged the S&P 500's 0.33% gain on the day. Meanwhile, the Dow gained 0.44%, and the Nasdaq, a tech-heavy index, added 0.01%.

Prior to today's trading, shares of the industrial conglomerate had gained 1.53% over the past month. This has outpaced the Conglomerates sector's loss of 2.22% and the S&P 500's gain of 0.89% 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. The company is expected to report EPS of $1.88, up 1.62% from the prior-year quarter. Meanwhile, our latest consensus estimate is calling for revenue of $9.69 billion, down 10.61% from the prior-year quarter.

For the full year, our Zacks Consensus Estimates are projecting earnings of $7.98 per share and revenue of $41.77 billion, which would represent changes of +12.24% and +3.05%, respectively, from the prior year.

Any recent changes to analyst estimates for HON should also be noted by investors. Recent revisions tend to reflect the latest near-term business trends. With this in mind, we can consider positive estimate revisions a sign of optimism about the company's business outlook.

Based on our research, we believe these estimate revisions are directly related to near-team stock moves. Investors can capitalize on this by using the Zacks Rank. This model considers these estimate changes and provides a simple, actionable rating system.

The Zacks Rank system, which ranges from #1 (Strong Buy) to #5 (Strong Sell), has an impressive outside-audited track record of outperformance, with #1 stocks generating an average annual return of +25% since 1988. Over the past month, the Zacks Consensus EPS estimate remained stagnant. HON currently has a Zacks Rank of #4 (Sell).

In terms of valuation, HON is currently trading at a Forward P/E ratio of 17.94. This valuation marks a premium compared to its industry's average Forward P/E of 17.32.

Meanwhile, HON's PEG ratio is currently 1.83. This popular metric is similar to the widely-known P/E ratio, with the difference being that the PEG ratio also takes into account the company's expected earnings growth rate. The Diversified Operations industry currently had an average PEG ratio of 1.83 as of yesterday's close.

The Diversified Operations industry is part of the Conglomerates sector. This group has a Zacks Industry Rank of 100, putting it in the top 39% 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.

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