Text size

Industrial conglomerate Honeywell reports earnings Friday morning before the market opens.

It is an important report. Honeywell (ticker: HON), after all, is one of the largest industrial companies in the world. Its businesses touch nearly every sector of the economy, including aerospace, technology, logistics, retail and energy. Company earnings, however, dont always get the attention they deserve, because Honeywell isnt a stock that draws widely divergent opinions.

Take aerospace peer General Electric (GE). Wall Street price targets range from $5 to $18 a share. The $13 spread is more than 100% of the current stock price, far wider than the average bull-bear spread for stocks in the Dow Jones Industrial Average. And the $5 target is more than 60% below current levels.

Street targets for Honeywell stock range from $163 to $208 a share. The $45 spread is about 25% of the current stock price and the $163 a share is just 7% lower than current levels.

The biggest problem investors have with Honeywell shares these days is valuation. The stock trades for 20 times estimated 2020 earnings, about an 8% premium to stocks in the S&P 500.

Analysts expect Honeywell earnings to exceed estimates, because that is what usually happens. Heres what else to expect on Friday, along with some recent history.

Barrons recently wrote positively about Honeywell, believing the company is in the midst of a transformation to a higher-market, software-industrial hybrid. We still feel that way. But since that article appeared in November, the stock is down about 3%, trailing the S&P 500 by about 8 percentage points.

Over the past 12 months Honeywell stock is up about 24%.

Write to Al Root at allen.root@dowjones.com

Original post:

Honeywell Reports Earnings Tomorrow. Heres What to Expect. - Barron's