Is It Too Late To Consider Buying Honeywell International Inc. (NYSE:HON)?

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Let’s talk about the popular Honeywell International Inc. (NYSE:HON). The company’s shares saw a decent share price growth in the teens level on the NYSE over the last few months. With many analysts covering the large-cap stock, we may expect any price-sensitive announcements have already been factored into the stock’s share price. But what if there is still an opportunity to buy? Today I will analyse the most recent data on Honeywell International’s outlook and valuation to see if the opportunity still exists.

See our latest analysis for Honeywell International

What’s the opportunity in Honeywell International?

The stock is currently trading at US$149 on the share market, which means it is overvalued by 21.54% compared to my intrinsic value of $122.27. This means that the buying opportunity has probably disappeared for now. But, is there another opportunity to buy low in the future? Given that Honeywell International’s share is fairly volatile (i.e. its price movements are magnified relative to the rest of the market) this could mean the price can sink lower, giving us another chance to buy in the future. This is based on its high beta, which is a good indicator for share price volatility.

What does the future of Honeywell International look like?

NYSE:HON Future Profit February 9th 19
NYSE:HON Future Profit February 9th 19
Investors looking for growth in their portfolio may want to consider the prospects of a company before buying its shares. Buying a great company with a robust outlook at a cheap price is always a good investment, so let’s also take a look at the company’s future expectations. However, with a negative profit growth of -2.6% expected over the next couple of years, near-term growth certainly doesn’t appear to be a driver for a buy decision for Honeywell International. This certainty tips the risk-return scale towards higher risk.

What this means for you:

Are you a shareholder? If you believe HON is currently trading above its value, selling high and buying it back up again when its price falls towards its real value can be profitable. Given the uncertainty from negative growth in the future, this could be the right time to reduce your total portfolio risk. But before you make this decision, take a look at whether its fundamentals have changed.

Are you a potential investor? If you’ve been keeping an eye on HON for a while, now may not be the best time to enter into the stock. Its price has risen beyond its true value, on top of a negative future outlook. However, there are also other important factors which we haven’t considered today, such as the track record of its management. Should the price fall in the future, will you be well-informed enough to buy?

Price is just the tip of the iceberg. Dig deeper into what truly matters – the fundamentals – before you make a decision on Honeywell International. You can find everything you need to know about Honeywell International in the latest infographic research report. If you are no longer interested in Honeywell International, you can use our free platform to see my list of over 50 other stocks with a high growth potential.

To help readers see past the short term volatility of the financial market, we aim to bring you a long-term focused research analysis purely driven by fundamental data. Note that our analysis does not factor in the latest price-sensitive company announcements.

The author is an independent contributor and at the time of publication had no position in the stocks mentioned. For errors that warrant correction please contact the editor at editorial-team@simplywallst.com.