The most recent earnings announcement Honeywell International Inc.’s (NYSE:HON) released in December 2018 signalled that the business gained from a substantial tailwind, more than doubling its earnings from the prior year. Below, I’ve laid out key numbers on how market analysts perceive Honeywell International’s earnings growth trajectory over the next few years and whether the future looks even brighter than the past. I will be looking at earnings excluding extraordinary items to exclude one-off activities to get a better understanding of the underlying drivers of earnings.
Analysts’ expectations for the upcoming year seems pessimistic, with earnings decreasing by a double-digit -14%. Over the medium term, earnings will begin to improve, climbing year on year, and arriving at US$6.6b by 2022.
Even though it’s informative understanding the growth year by year relative to today’s level, it may be more insightful analyzing the rate at which the company is growing on average every year. The benefit of this technique is that we can get a bigger picture of the direction of Honeywell International’s earnings trajectory over the long run, irrespective of near term fluctuations, which may be more relevant for long term investors. To compute this rate, I’ve inserted a line of best fit through analyst consensus of forecasted earnings. The slope of this line is the rate of earnings growth, which in this case is 0.4%. This means, we can expect Honeywell International will grow its earnings by 0.4% every year for the next few years.
For Honeywell International, I’ve compiled three essential aspects you should further research:
- Financial Health: Does it have a healthy balance sheet? Take a look at our free balance sheet analysis with six simple checks on key factors like leverage and risk.
- Valuation: What is HON worth today? Is the stock undervalued, even when its growth outlook is factored into its intrinsic value? The intrinsic value infographic in our free research report helps visualize whether HON is currently mispriced by the market.
- Other High-Growth Alternatives: Are there other high-growth stocks you could be holding instead of HON? Explore our interactive list of stocks with large growth potential to get an idea of what else is out there you may be missing!
We aim to bring you long-term focused research analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material.
If you spot an error that warrants correction, please contact the editor at email@example.com. This article by Simply Wall St is general in nature. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. Simply Wall St has no position in the stocks mentioned. Thank you for reading.